IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v57y2009i4p768-784.html
   My bibliography  Save this article

Collusion And Research Joint Ventures

Author

Listed:
  • KAZ MIYAGIWA

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.

Suggested Citation

  • Kaz Miyagiwa, 2009. "Collusion And Research Joint Ventures," Journal of Industrial Economics, Wiley Blackwell, vol. 57(4), pages 768-784, December.
    • Handle: RePEc:bla:jindec:v:57:y:2009:i:4:p:768-784
    DOI: 10.1111/j.1467-6451.2009.00399.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-6451.2009.00399.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-6451.2009.00399.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James Cardon & Dan Sasaki, 1998. "Preemptive Search and R&D Clustering," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 324-338, Summer.
    2. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 1-12.
    3. Jeanine Miklós-Thal, 2011. "Optimal collusion under cost asymmetry," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(1), pages 99-125, January.
    4. Verboven, Frank, 1997. "Collusive behavior with heterogeneous firms," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 121-136, May.
    5. Harrington, Joseph E, Jr, 1991. "The Determination of Price and Output Quotas in a Heterogeneous Cartel," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 767-792, November.
    6. David R. Collie, 2006. "Collusion in Differentiated Duopolies with Quadratic Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 58(2), pages 151-159, April.
    7. Cabral, Luis M. B., 2000. "R&D cooperation and product market competition," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1033-1047, October.
    8. Rothschild, R., 1999. "Cartel stability when costs are heterogeneous," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 717-734, July.
    9. Bloch, Francis & Markowitz, Paul, 1996. "Optimal disclosure delay in multistage R&D competition," International Journal of Industrial Organization, Elsevier, vol. 14(2), pages 159-179.
    10. Lambertini, Luca & Poddar, Sougata & Sasaki, Dan, 2002. "Research joint ventures, product differentiation, and price collusion," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 829-854, June.
    11. Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
    12. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    13. Yannis Caloghirou & Stavros Ioannides & Nicholas S. Vonortas, 2003. "Research Joint Ventures," Journal of Economic Surveys, Wiley Blackwell, vol. 17(4), pages 541-570, September.
    14. Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aguiar, Luis & Gagnepain, Philippe, 2017. "European cooperative R&D and firm performance: Evidence based on funding differences in key actions," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 1-31.
    2. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2017. "Research and Development Cooperatives and Market Collusion: A Global Dynamic Approach," Journal of Optimization Theory and Applications, Springer, vol. 174(2), pages 567-612, August.
    3. Tomaso Duso & Lars-Hendrik Röller & Jo Seldeslachts, 2014. "Collusion Through Joint R&D: An Empirical Assessment," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 349-370, May.
    4. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2016. "R&D Cooperatives and Market Collusion: A Global Dynamic Approach," Tinbergen Institute Discussion Papers 16-048/II, Tinbergen Institute.
    5. Rockett, Katharine, 2010. "Property Rights and Invention," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 315-380, Elsevier.
    6. Ángel L. López & Xavier Vives, 2019. "Overlapping Ownership, R&D Spillovers, and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2394-2437.
    7. Levy, Nadav, 2012. "Technology sharing and tacit collusion," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 204-216.
    8. Brunner, Philipp & Letina, Igor & Schmutzler, Armin, 2024. "Research joint ventures: The role of financial constraints," European Economic Review, Elsevier, vol. 165(C).
    9. López, Ángel L. & Vives, Xavier, 2016. "Cross-ownership, R&D Spillovers, and Antitrust Policy," IESE Research Papers D/1140, IESE Business School.
    10. Prokop, Jacek & Karbowski, Adam, 2018. "R&D spillovers and cartelization of industries with differentiated products," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11(3), pages 44-56.
    11. Adam Karbowski & Jacek Prokop, 2018. "R&D activities of enterprises, product market leadership, and collusion," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 735-753.
    12. Karbowski Adam & Prokop Jacek, 2020. "The Impact of Patents and R&D Cooperation on R&D Investments in a Differentiated Goods Industry," South East European Journal of Economics and Business, Sciendo, vol. 15(1), pages 122-133, June.
    13. Małgorzata Knauff & Adam Karbowski, 2021. "R&D Investments in Markets with Network Effects," Journal of Industry, Competition and Trade, Springer, vol. 21(2), pages 225-250, June.
    14. Naoto Aoyama & Emilson C.D. Silva, 2017. "Asymmetric Innovation Agreements under Environmental Regulation," CESifo Working Paper Series 6782, CESifo.
    15. Naoto Aoyama & Emilson Caputo Delfino Silva, 2022. "Endogenous Abatement Technology Agreements under Environmental Regulation," Games, MDPI, vol. 13(2), pages 1-30, April.
    16. Neelanjan Sen & Priyansh Minocha & Arghya Dutta, 2023. "Technology licensing and collusion," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(3), pages 694-752, September.
    17. Hoernig, Steffen & Cambini, Carlo, 2013. "Cooperative Investment, Uncertainty and Access," CEPR Discussion Papers 9376, C.E.P.R. Discussion Papers.
    18. Karbowski, Adam & Kryśkiewicz, Łukasz & Prokop, Jacek, 2018. "Kartele jako przedmiot polityki gospodarczej [Cartels in Public Policy Perspective]," MPRA Paper 90364, University Library of Munich, Germany, revised 2018.
    19. Shastitko, Andrei (Шаститко, Андрей), 2015. "A new look at the antimonopoly control of horizontal agreements [Новый Взгляд На Антимонопольный Контроль Горизонтальных Соглашений]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 134-154.
    20. Motchenkova, E.I. & Rus, O., 2011. "Research joint ventures and price collusion: Joint analysis of the impact of R&D subsidies and antitrust fines," Serie Research Memoranda 0025, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    21. Adam Karbowski, 2021. "Unproductive entrepreneurship and patents," Bank i Kredyt, Narodowy Bank Polski, vol. 52(5), pages 473-494.
    22. Claudia Ranocchia & Luca Lambertini, 2021. "Porter Hypothesis vs Pollution Haven Hypothesis: Can There Be Environmental Policies Getting Two Eggs in One Basket?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 177-199, January.
    23. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2018. "Cooperative investment, access, and uncertainty," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 78-106.
    24. Dollinger, Jérôme & Mauleon, Ana & Vannetelbosch, Vincent, 2023. "R&D and Market Sharing Agreements," LIDAM Discussion Papers CORE 2023004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claudia Ranocchia & Luca Lambertini, 2021. "Porter Hypothesis vs Pollution Haven Hypothesis: Can There Be Environmental Policies Getting Two Eggs in One Basket?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 177-199, January.
    2. Aitor Ciarreta & Carlos Gutiérrez-Hita, 2012. "Collusive behaviour under cost asymmetries when firms compete in supply functions," Journal of Economics, Springer, vol. 106(3), pages 195-219, July.
    3. Jeanine Miklós-Thal, 2011. "Optimal collusion under cost asymmetry," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(1), pages 99-125, January.
    4. Hattori, Keisuke, 2021. "Profit-Sharing vs Price-Fixing Collusion with Heterogeneous Firms," MPRA Paper 110800, University Library of Munich, Germany.
    5. Constantine Manasakis & Emmanuel Petrakis & Vasileios Zikos‡, 2014. "Downstream Research Joint Venture with Upstream Market Power," Southern Economic Journal, John Wiley & Sons, vol. 80(3), pages 782-802, January.
    6. António Brandão & Joana Pinho & Hélder Vasconcelos, 2014. "Asymmetric Collusion with Growing Demand," Journal of Industry, Competition and Trade, Springer, vol. 14(4), pages 429-472, December.
    7. Motchenkova, E.I. & Rus, O., 2011. "Research joint ventures and price collusion: Joint analysis of the impact of R&D subsidies and antitrust fines," Serie Research Memoranda 0025, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    8. Hinloopen, Jeroen & Smrkolj, Grega & Wagener, Florian, 2013. "In Defense of Trusts: R&D Cooperation in Global Perspective," MPRA Paper 63551, University Library of Munich, Germany, revised 09 Apr 2015.
    9. David Collie, 2004. "Collusion and the elasticity of demand," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-6.
    10. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2016. "R&D Cooperatives and Market Collusion: A Global Dynamic Approach," Tinbergen Institute Discussion Papers 16-048/II, Tinbergen Institute.
    11. Brito, Duarte & Ribeiro, Ricardo & Vasconcelos, Helder, 2018. "Quantifying the coordinated effects of partial horizontal acquisitions," European Economic Review, Elsevier, vol. 110(C), pages 108-149.
    12. Etienne Billette de Villemeur & Laurent Flochel & Bruno Versaevel, 2013. "Optimal collusion with limited liability," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(3), pages 203-227, September.
    13. Silipo, Damiano B., 2008. "Incentives and forms of cooperation in research and development," Research in Economics, Elsevier, vol. 62(2), pages 101-119, June.
    14. Leonardo Madio & Aldo Pignataro, 2022. "Collusion sustainability with a capacity constrained firm," "Marco Fanno" Working Papers 0295, Dipartimento di Scienze Economiche "Marco Fanno".
    15. Jen-Yao Lee & Chen-Chia Fan & Chien-Shu Tsai, 2023. "Network Externalities and Downstream Collusion under Asymmetric Costs: A Note," Games, MDPI, vol. 14(2), pages 1-11, March.
    16. Williams Huamani & Marcelo José Braga & Lucas Campio Pinha, 2024. "Degree of product differentiation, antitrust enforcement and cartel stability," Journal of Economics, Springer, vol. 141(3), pages 275-287, April.
    17. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2017. "Research and Development Cooperatives and Market Collusion: A Global Dynamic Approach," Journal of Optimization Theory and Applications, Springer, vol. 174(2), pages 567-612, August.
    18. Filipa Mota & João Correia-da-Silva & Joana Pinho, 2023. "Public–Private Collusion," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(4), pages 393-417, June.
    19. Stefano Colombo, 2011. "Pricing Policy and Partial Collusion," Journal of Industry, Competition and Trade, Springer, vol. 11(4), pages 325-349, December.
    20. Leonardo Madio & Aldo Pignataro, 2022. "Collusion Sustainability with a Capacity Constrained Firm," CESifo Working Paper Series 10170, CESifo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:57:y:2009:i:4:p:768-784. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.