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Pozioma współpraca badawczo-rozwojowa a kartelizacja gałęzi

Horizontal R&D cooperation and market cartelization

Jacek Prokop () and Adam Karbowski ()

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this paper is to investigate the impact of horizontal R&D cooperation on cartel formation in the product market. We analyze the case in which the R&D expenditures that precede the production process are aimed at the reduction of the unit manufacturing costs, and could create positive externalities for the potential competitors. We compare how the different degrees of R&D cooperation effect on firms’ incentives to create a cartel in the product market. Like the previous literature (Kaiser, 2002; Kamien et al., 1992), we analyze a two-stage game with two firms as players. In the first stage, firms simultaneously decide on R&D expenditures and, in the second stage, they meet in the final product market. It is assumed that without successful cartel formation in the industry, firms compete in the product market in Stackelberg fashion. The analysis was made for two variants: 1) linear functions of total costs of production and 2) quadratic functions of total costs of production. For both variants, the numerical analysis revealed that a closer cooperation at the R&D stage strengthens the incentives to create a cartel in the product market. As a consequence it should be supposed that the horizontal R&D cooperation brings the relatively high risk of industry cartelization. This fact raises serious antitrust issues. Industry cartelization translates thus into unbeneficial economic outcomes for customers on the given product market.

Keywords: research and development; cooperation; cartels (search for similar items in EconPapers)
JEL-codes: L24 O32 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-com and nep-sog
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