IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

In Defense of Trusts: R&D Cooperation in Global Perspective

  • Hinloopen, J.

    ()

    (University of Amsterdam)

  • Smrkolj, G.

    ()

    (University of Amsterdam)

  • Wagener, F.O.O.

    ()

    (University of Amsterdam)

We examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market collusion. For that we utilize a dynamic model of R&D whereby we consider all possible initial marginal cost levels (technologies), including those that exceed the choke price. This global analysis yields four possibilities: initial marginal costs are above the choke price and this technology is, or is not, developed further, and initial marginal costs are below the choke price and the technology is, or is not, (eventually) taken off the market. We show that an extension of the cooperative agreement towards collusion in the product market is not necessarily welfare reducing: if firms collude, they (i) develop further a wider range of initial technologies, (ii) invest more in R&D such that process innovations are pursued more quickly, and (iii) abandon the technology for a smaller set of initial marginal costs. We also discuss the implications of our analysis for antitrust policy.

If 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.

File URL: http://www1.fee.uva.nl/cendef/publications/papers/In%20Defense%20of%20Trusts%202013.pdf
Download Restriction: no

Paper provided by Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance in its series CeNDEF Working Papers with number 13-05.

as
in new window

Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:ams:ndfwpp:13-05
Contact details of provider: Postal: Dept. of Economics and Econometrics, Universiteit van Amsterdam, Roetersstraat 11, NL - 1018 WB Amsterdam, The Netherlands
Phone: + 31 20 525 52 58
Fax: + 31 20 525 52 83
Web page: http://www.fee.uva.nl/cendef/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Nick Bloom & Mark Schankerman & John Van Reenen, 2005. "Identifying technology spillovers and product market rivalry," STICERD - Economics of Industry Papers 40, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  2. Hernán, Roberto & Marín Uribe, Pedro Luis & Siotis, Georges, 2000. "An Empirical Evaluation Of The Determinants Of Research Joint Venture Formation," CEPR Discussion Papers 2442, C.E.P.R. Discussion Papers.
  3. Salant, S.W. & Shaffer, G., 1997. "Optimal Asymmetric Strategies in Research Joint Ventures," Papers 97-06, Michigan - Center for Research on Economic & Social Theory.
  4. 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.
  5. Michelle S. Goeree & Eric Helland, 2009. "Do research joint ventures serve a collusive function?," IEW - Working Papers 448, Institute for Empirical Research in Economics - University of Zurich, revised Jul 2012.
  6. C. Lanier Benkard, 2004. "A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft," Review of Economic Studies, Wiley Blackwell, vol. 71, pages 581-611, 07.
  7. Michel, Philippe, 1982. "On the Transversality Condition in Infinite Horizon Optimal Problems," Econometrica, Econometric Society, vol. 50(4), pages 975-85, July.
  8. Patrick Greenlee & Bruno Cassiman, 1999. "Product market objectives and the formation of research joint ventures," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 115-130.
  9. Benkard, C. Lanier, 2000. "A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft," Research Papers 1636, Stanford University, Graduate School of Business.
  10. Lee, Tom & Wilde, Louis L, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, MIT Press, vol. 94(2), pages 429-36, March.
  11. Cellini, Roberto & Lambertini, Luca, 2009. "Dynamic R&D with spillovers: Competition vs cooperation," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 568-582, March.
  12. Hinloopen, Jeroen & Smrkolj, Grega & Wagener, Florian, 2013. "From mind to market: A global, dynamic analysis of R&D," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2729-2754.
  13. Grossman, Gene M & Shapiro, Carl, 1986. "Research Joint Ventures: An Antitrust Analysis," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 315-37, Fall.
  14. Kiseleva, T. & Wagener, F.O.O., 2009. "Bifurcations of optimal vector fields in the shallow lake model," CeNDEF Working Papers 09-12, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
  15. d'ASPREMONT, Claude & JACQUEMIN, Alexis, . "Cooperative and noncooperative R&D in duopoly with spillovers," CORE Discussion Papers RP -823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  16. repec:dgr:kubcen:200399 is not listed on IDEAS
  17. Viatcheslav Vinogradov & Kresimir Zigic & Eugen Kovac, 2010. "Technological Leadership and the Persistence of Monopoly under Endogenous Entry: Static versus Dynamic Analysis," 2010 Meeting Papers 795, Society for Economic Dynamics.
  18. Brodley, Joseph F, 1990. "Antitrust Law and Innovation Cooperation," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 97-112, Summer.
  19. Jeroen Hinloopen, 2003. "R&D Efficiency Gains Due to Cooperation," Journal of Economics, Springer, vol. 80(2), pages 107-125, October.
  20. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
  21. L. Lambertini & A. Mantovani, 2005. "Process and Product Innovation by a Multiproduct Monopolist: A Dynamic Approach," Working Papers 551, Dipartimento Scienze Economiche, Universita' di Bologna.
  22. Yannis Caloghirou & Stavros Ioannides & Nicholas S. Vonortas, 2003. "Research Joint Ventures," Journal of Economic Surveys, Wiley Blackwell, vol. 17(4), pages 541-570, 09.
  23. Eugen Kovac & Viatcheslav Vinogradov & Krešimir Žigiæ, 2009. "Technological Leadership and Persistence of Monopoly under Endogenous Entry: Static versus Dynamic Analysis," CERGE-EI Working Papers wp401, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  24. John Howells, 2002. "The Response of Old Technology Incumbents to Technological Competition - Does the Sailing Ship Effect Exist?," Journal of Management Studies, Wiley Blackwell, vol. 39(7), pages 887-906, November.
  25. Cabral, Luis M. B., 2000. "R&D cooperation and product market competition," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1033-1047, October.
  26. Cooper, Arnold C. & Schendel, Dan, 1976. "Strategic responses to technological threats," Business Horizons, Elsevier, vol. 19(1), pages 61-69, February.
  27. Lars-Hendrik Röller & Ralph Siebert & Mihkel M. Tombak, 2007. "Why Firms Form (or do not Form) RJVS," Economic Journal, Royal Economic Society, vol. 117(522), pages 1122-1144, 07.
  28. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
  29. C. Lanier Benkard, 2000. "A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft," NBER Working Papers 7710, National Bureau of Economic Research, Inc.
  30. Kiseleva, T. & Wagener, F.O.O., 2011. "Bifurcations of Optimal Vector Fields," CeNDEF Working Papers 11-05, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
  31. Lindenberg, Eric B & Ross, Stephen A, 1981. "Tobin's q Ratio and Industrial Organization," The Journal of Business, University of Chicago Press, vol. 54(1), pages 1-32, January.
  32. Kenneth G. Elzinga & David E. Mills, 2011. "The Lerner Index of Monopoly Power: Origins and Uses," American Economic Review, American Economic Association, vol. 101(3), pages 558-64, May.
  33. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  34. Geroski, P A, 1992. "Vertical Relations between Firms and Industrial Policy," Economic Journal, Royal Economic Society, vol. 102(410), pages 138-47, January.
  35. C. Lanier Benkard, 2004. "A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 581-611.
  36. 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.
  37. Petit, Maria Luisa & Tolwinski, Boleslaw, 1999. "R&D cooperation or competition?," European Economic Review, Elsevier, vol. 43(1), pages 185-208, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ams:ndfwpp:13-05. See general 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: (Cees C.G. Diks)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.