Collusion and research joint ventures

Arbeitspapier

We examine whether cooperation in R&D 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 competitive R&D creates inter-firm asymmetries, which destabilizes the collusive equilibrium. Innovation sharing through cooperative R&D preserves symmetries, thereby facilitating collusion. Sharing an efficient technology also increases industry profit, which contributes to the collusion stability but also raises social welfare. Interestingly, a welfare improvement is less likely if innovation leads to a large cost reduction. The effect of licensing under competition R&D is also examined.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 704

Classification and Topics

• Classification: Wirtschaft ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets
• Subject: Collusion ; Research Joint Ventures ; Innovation ; R&D ; Forschungskooperation ; Joint Venture ; Kartell ; Industrieforschung ; Innovation ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Miyagiwa, Kaz
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/92843
• Last update: 10.03.2025, 11:44 AM CET