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Does R&D cooperation facilitate price collusion? An experiment

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  • Suetens, Sigrid

Abstract

We examine in a laboratory experiment whether R&D cooperation facilitates tacit price collusion. For two scenarios of technological spillovers, a baseline treatment without binding contract possibilities and a contract treatment where it is possible to credibly commit to an R&D contract, are run. We find that the degree of price collusion in the contract treatments is significantly higher in periods where R&D contracts are made than in periods without contracts, and than in the baseline treatments.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 66 (2008)
Issue (Month): 3-4 (June)
Pages: 822-836

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Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:822-836

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  1. D Leahy & J.P. Neary, 1995. "Public Policy Towards R&D in Oligopolistic Industries," CEP Discussion Papers dp0270, Centre for Economic Performance, LSE.
  2. Hinloopen, Jeroen, 2000. "Strategic R&D Co-operatives," Research in Economics, Elsevier, vol. 54(2), pages 153-185, June.
  3. Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
  4. Darmot Leahy & J. Peter Neary, 1997. "Public Policy Towards R & D in Oligopolistic Industry," Politická ekonomie, University of Economics, Prague, vol. 1997(5), pages 683-698.
  5. Salant, S.W. & Shaffer, G., 1997. "Optimal Asymmetric Strategies in Research Joint Ventures," Papers 97-06, Michigan - Center for Research on Economic & Social Theory.
  6. Suetens, S., 2003. "A Duopoly Experiment on Cooperative and Noncooperative R&D," Discussion Paper 2003-77, Tilburg University, Center for Economic Research.
  7. Lambertini, Luca & Poddar, Sougata & Sasaki, Dan, 2002. "Research joint ventures, product differentiation, and price collusion," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 829-854, June.
  8. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
  9. Isaac, R. Mark & Reynolds, Stanley S., 1992. "Schumpeterian competition in experimental markets," Journal of Economic Behavior & Organization, Elsevier, vol. 17(1), pages 59-100, January.
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Citations

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Cited by:
  1. Donja Darai & Dario Sacco & Armin Schmutzler, 2009. "Competition and Innovation: An Experimental Investigation," Working Papers 0608, University of Zurich, Socioeconomic Institute, revised Apr 2007.
  2. Andreas Nicklisch, 2008. "Semi-collusive advertising and pricing in experimental duopolies," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2008_25, Max Planck Institute for Research on Collective Goods.
  3. Duso, Tomaso & Röller, Lars-Hendrik & Seldeslachts, Jo, 2010. "Collusion through Joint R&D: An Empirical Assessment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 343, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Donja Darai & Jens Grosser & Nadja Trhal, 2009. "Patents versus Subsidies – A Laboratory Experiment," Working Papers 0905, University of Zurich, Socioeconomic Institute.
  5. Yasunori Ouchida & Daisaku Goto, 2012. "What is the socially desirable formation of environmental R&D?," IDEC DP2 Series 2-6, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
  6. Sacco, Dario & Schmutzler, Armin, 2011. "Is there a U-shaped relation between competition and investment?," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 65-73, January.
  7. Jannett Highfill & Michael McAsey, 2010. "Firm Metrics with Continuous R&D, Quality Improvement, and Cournot Quantities," International Advances in Economic Research, Springer, vol. 16(3), pages 243-256, August.
  8. Subhasish M. Chowdhury & Stephen Martin, 2011. "Innovation Races with the Possibility of Failure," Working Papers 1106, University of Otago, Department of Economics, revised Aug 2011.
  9. Mathias Erlei & Anne-Kathrin Dimmig, 2012. "Quasi-Rational R&D Behavior in an Environment with Fundamental Uncertainty," TUC Working Papers in Economics 0008, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).

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