Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2017-02-10
Number: 17-020/VII
Author-Name: Jeroen Hinloopen
Author-Email: J.Hinloopen@uva.nl
Author-Workplace-Name: University of Amsterdam, The Netherlands
Author-Name: Grega Smrkolj
Author-Email: Grega.Smrkolj@newcastle.ac.uk
Author-Workplace-Name: Newcastle University, United Kingdom
Author-Name: Florian Wagener
Author-Email: F.O.O.Wagener@uva.nl
Author-Workplace-Name: University of Amsterdam, The Netherlands
Title: R&D Cooperatives and Market Collusion: A Global Dynamic Approach
Abstract: We present a continuous-time generalization of the seminal R&D model of d'Aspremont and Jacquemin (The American Economic Review 78(5): 1133–1137, 1988) to examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market collusion. We consider all trajectories that are candidates for an optimal solution as well as initial marginal cost levels that exceed the choke price. Firms that collude develop further a wider range of initial technologies, pursue innovations more quickly, and are less likely to abandon a technology. Product market collusion could thus yield higher total surplus.
Classification-JEL: D43, D92, L13, L41, O31, O38
Keywords: Antitrust policy, Bifurcations, Collusion, R&D cooperatives, Spillovers
File-Url: https://papers.tinbergen.nl/17020.pdf
File-Format: application/pdf
File-Size: 1340627 bytes
Handle: RePEc:tin:wpaper:20170020