Does R&D Cooperation Facilitate Price Collusion? An Experiment

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    Abstract

    In the paper the impact of R&D cooperation on prices in experimental duopoly markets is examined.As a theoretical benchmark for the experiment, a two-stage duopoly model with an R&D stage with technological spillovers and a pricing stage is used.For two scenarios of technological spillovers (no versus complete spillovers), a treat-ment where it is possible to credibly commit to an R&D contract and a baseline treatment without binding contract possibilities, are run.Findings are that, in general, prices are between the subgame perfect Nash and the cooperative level.Further, for both spillover levels prices are higher in periods where R&D contracts are committed to, than in other periods, and to a lesser extent compared to the baseline treatments.
    Original languageEnglish
    Place of PublicationTilburg
    PublisherVakgroep CentER
    Number of pages31
    Volume2003-99
    Publication statusPublished - 2003

    Publication series

    NameCentER Discussion Paper
    Volume2003-99

    Keywords

    • R&D
    • cooperation
    • duopoly
    • prices
    • spillovers

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