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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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  • Suetens, Sigrid, 2008. "Does R&D cooperation facilitate price collusion? An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 822-836, June.
  • Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:822-836
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    Cited by:

    1. Hinloopen, J. & Smrkolj, G. & Wagener, F.O.O., 2013. "In Defense of Trusts: R&D Cooperation in Global Perspective," CeNDEF Working Papers 13-05, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    2. Tomaso Duso & Lars-Hendrik Röller & Jo Seldeslachts, 2014. "Collusion Through Joint R&D: An Empirical Assessment," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 349-370, May.
    3. Daniel Rondeau & Pascal Courty & Maurice Doyon, 2016. "Simultaneous Allocation of Bundled Goods through Auctions: Assessing the Case for Joint Bidding," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 838-859.
    4. López, Ángel Luis & Vives, Xavier, 2016. "Cross-ownership, R&D Spillovers, and Antitrust Policy," CEPR Discussion Papers 11315, C.E.P.R. Discussion Papers.
    5. Donja Darai & Dario Sacco & Armin Schmutzler, 2010. "Competition and innovation: an experimental investigation," Experimental Economics, Springer;Economic Science Association, vol. 13(4), pages 439-460, December.
    6. 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.
    7. Tannistra Banerjee & Stephen Martin, 2015. "Pharmaceutical Regulation and Innovative Performance: A Decision‐theoretic Model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(3), pages 177-190, April.
    8. Andreas Nicklisch, 2008. "Semi-collusive advertising and pricing in experimental duopolies," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2008_25, Max Planck Institute for Research on Collective Goods.
    9. Agbo, Maxime & Rousselière, Damien & Salanié, Julien, 2015. "Agricultural marketing cooperatives with direct selling: A cooperative–non-cooperative game," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 56-71.
    10. repec:bpj:rneart:v:15:y:2017:i:1:p:35-61:n:2 is not listed on IDEAS
    11. Engel, Christoph & Kleine, Marco, 2015. "Who is afraid of pirates? An experiment on the deterrence of innovation by imitation," Research Policy, Elsevier, vol. 44(1), pages 20-33.
    12. Konovalov, Alexander, 2014. "Competition and Cooperation in Network Games," Working Papers in Economics 583, University of Gothenburg, Department of Economics.
    13. Ángel L. López & Xavier Vives, 2016. "Overlapping Ownership, R&D Spillovers, and Antitrust Policy," CESifo Working Paper Series 5935, CESifo Group Munich.
    14. repec:hal:journl:halshs-01098762 is not listed on IDEAS
    15. Wenzel, Tobias & Normann, Hans-Theo, 2015. "Shrouding add-on information: an experimental study," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113149, Verein für Socialpolitik / German Economic Association.
    16. Krämer Jan & Vogelsang Ingo, 2016. "Co-Investments and Tacit Collusion in Regulated Network Industries: Experimental Evidence," Review of Network Economics, De Gruyter, vol. 15(1), pages 35-61, March.
    17. Tannista Banerjee & Ralph Siebert, 2013. "The Impact of R&D Cooperation on Drug Variety Offered on the Market: Evidence from the Pharmaceutical Industry," Auburn Economics Working Paper Series auwp2013-20, Department of Economics, Auburn University.
    18. repec:kap:iaecre:v:16:y:2010:i:3:p:243-256 is not listed on IDEAS
    19. Normann, Hans-Theo & Rösch, Jürgen & Schultz, Luis Manuel, 2015. "Do buyer groups facilitate collusion?," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 72-84.
    20. Timothy N. Cason & Lata Gangadharan, 2013. "Cooperation Spillovers And Price Competition In Experimental Markets," Economic Inquiry, Western Economic Association International, vol. 51(3), pages 1715-1730, July.
    21. repec:eee:indorg:v:54:y:2017:i:c:p:89-124 is not listed on IDEAS
    22. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2016. "R&D Cooperatives and Market Collusion: A Global Dynamic Approach," Tinbergen Institute Discussion Papers 16-048/II, Tinbergen Institute.

    More about this item

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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