COLLUSION AND RESEARCH JOINT VENTURES -super-*
I examine the question whether cooperation in R&D among firms producing similar products leads to product market collusion. Suppose that firms engage in a stochastic R&D race while maintaining the collusive equilibrium in a repeated-game framework. Innovation under non-cooperative R&D leads to an inter-firm asymmetry, destabilizing collusion in pre-discovery and post-discovery periods. Innovation sharing under cooperative R&D preserves the symmetry and also increases total profit, thereby facilitating collusion. However, welfare may increase with cooperative R&D. I also examine the condition for collusion under licensing and compare the results. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.
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Volume (Year): 57 (2009)
Issue (Month): 4 (December)
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