Collusion and Research Joint Ventures
AbstractWe examine whether cooperation in R&D leads to product market collusion. Suppose firms compete in a stochastic R&D race while maintaining the collusive equilibrium in a repeated-game framework. Innovation creates a cost asymmetry and destabilizes the collusive equilibrium. Firms forming an R&D joint venture can maintain cost symmetries through technology sharing agreement, thereby stabilizing collusion. The stability of post-discovery collusion makes collusion stable in pre-discovery periods. However, formation of R&D cooperatives may increase social welfare because firms share an efficient technology. Interestingly, a welfare improvement is less likely if innovation leads to a large cost reduction.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 0705.
Date of creation: Mar 2007
Date of revision:
Other versions of this item:
- NEP-ALL-2007-07-07 (All new papers)
- NEP-COM-2007-07-07 (Industrial Competition)
- NEP-INO-2007-07-07 (Innovation)
- NEP-IPR-2007-07-07 (Intellectual Property Rights)
- NEP-MIC-2007-07-07 (Microeconomics)
- NEP-TID-2007-07-07 (Technology & Industrial Dynamics)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sue Mialon).
If references are entirely missing, you can add them using this form.