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Advantageous Semi-collusion

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  • Brod, Andrew
  • Shivakumar, Ram

Abstract

The textbook view that cartels increase industry profits and lower consumer welfare ignores the effects of competition in other activities. A revisionist view shows that, when cartel members compete in other activities, i.e., when they semicollude, the cartel members may be worse-off and consumers better-off. Using a two-stage model in which the nonproduction activity is R&D and is subject to technological spillovers, the authors show that both the traditional and revisionist views can be wrong, that consumers and producers can both be made worse-off, or both better-off, by a semicollusive production cartel. Copyright 1999 by Blackwell Publishing Ltd

Suggested Citation

  • Brod, Andrew & Shivakumar, Ram, 1999. "Advantageous Semi-collusion," Journal of Industrial Economics, Wiley Blackwell, vol. 47(2), pages 221-230, June.
  • Handle: RePEc:bla:jindec:v:47:y:1999:i:2:p:221-30
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    Citations

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    Cited by:

    1. Ben Ferrett & Joanna Poyago-Theotoky, 2016. "Horizontal Agreements and R&D Complementarities: Merger versus RJV," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 23(1), pages 87-107, February.
    2. Kai Zhao, 2015. "Product competition and R&D investment under spillovers within full or partial collusion games," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-27, December.
    3. repec:eee:indorg:v:53:y:2017:i:c:p:371-398 is not listed on IDEAS
    4. Matsumura, Toshihiro & Matsushima, Noriaki & Cato, Susumu, 2013. "Competitiveness and R&D competition revisited," Economic Modelling, Elsevier, vol. 31(C), pages 541-547.
    5. Arijit Mukherjee, 2002. "Advantageous or Disadvantageous Semi-collusion Licensing in a Vertically Separated Industry," Industrial Organization 0211006, EconWPA.
    6. Beladi, Hamid & Mukherjee, Arijit, 2012. "Footloose foreign firm and profitable domestic merger," Journal of Economic Behavior & Organization, Elsevier, vol. 83(2), pages 186-194.
    7. George Symeonidis, 2008. "Downstream Competition, Bargaining, and Welfare," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 247-270, 03.
    8. Pedro Cosme Costa Vieira, 2005. "Animals domestication and agriculture as outcomes of collusion," FEP Working Papers 164, Universidade do Porto, Faculdade de Economia do Porto.
    9. Pedro Gonzaga & António Brandão & Helder Vasconcelos, 2014. "Theory of Semi-Collusion in the Labor Market," FEP Working Papers 522, Universidade do Porto, Faculdade de Economia do Porto.
    10. Martzoukos, Spiros H. & Zacharias, Eleftherios, 2013. "Real option games with R&D and learning spillovers," Omega, Elsevier, vol. 41(2), pages 236-249.
    11. Shibata, Takashi, 2014. "Market structure and R&D investment spillovers," Economic Modelling, Elsevier, vol. 43(C), pages 321-329.
    12. Ghosh, Arghya & Morita, Hodaka, 2012. "Competitor collaboration and product distinctiveness," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 137-152.
    13. Konovalov, Alexander, 2014. "Competition and Cooperation in Network Games," Working Papers in Economics 583, University of Gothenburg, Department of Economics.
    14. Hinloopen, Jeroen, 2000. "Strategic R&D Co-operatives," Research in Economics, Elsevier, vol. 54(2), pages 153-185, June.
    15. Witness Simbanegavi, 2009. "INFORMATIVE ADVERTISING: COMPETITION OR COOPERATION? -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 57(1), pages 147-166, March.

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