COLLUSION AND RESEARCH JOINT VENTURES*

Kaz Miyagiwa ()

Journal of Industrial Economics, 2009, vol. 57, issue 4, 768-784

Abstract: 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.

Date: 2009
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Citations: View citations in EconPapers (28)

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https://doi.org/10.1111/j.1467-6451.2009.00399.x

Related works:
Working Paper: Collusion and Research Joint Ventures (2007)
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