IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v66y2008i3-4p822-836.html
   My bibliography  Save this article

Does R&D cooperation facilitate price collusion? An experiment

Author

Listed:
  • Suetens, Sigrid

Abstract

We examine in a laboratory experiment whether R&D cooperation facilitates tacit price collusion. For two scenarios of technological spillovers, a baseline treatment without binding contract possibilities and a contract treatment where it is possible to credibly commit to an R&D contract, are run. We find that the degree of price collusion in the contract treatments is significantly higher in periods where R&D contracts are made than in periods without contracts, and than in the baseline treatments.

Suggested Citation

  • Suetens, Sigrid, 2008. "Does R&D cooperation facilitate price collusion? An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 822-836, June.
    • Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:822-836
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(07)00036-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
    2. Davis, Douglas D. & Holt, Charles a., 1993. "Experimental economics: Methods, problems and promise," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 8(2), pages 179-212.
    3. Suzumura, Kotaro, 1992. "Cooperative and Noncooperative R&D in an Oligopoly with Spillovers," American Economic Review, American Economic Association, vol. 82(5), pages 1307-1320, December.
    4. Martin, Stephen, 1996. "R & D joint ventures and tacit product market collusion," European Journal of Political Economy, Elsevier, vol. 11(4), pages 733-741, April.
    5. Selten, Reinhard & Stoecker, Rolf, 1986. "End behavior in sequences of finite Prisoner's Dilemma supergames A learning theory approach," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 47-70, March.
    6. Roberto Hernán & Pedro L. Marín & Georges Siotis, 2003. "An empirical evaluation of the determinants of Research Joint Venture Formation," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 75-89, March.
    7. Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-325, June.
    8. 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.
    9. van Wegberg, M.J., 1995. "Can R&D alliances facilitate the formation of a cartel? The example of the European IT industry," Research Memorandum 004, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    10. Huck, Steffen & Normann, Hans-Theo & Oechssler, Jorg, 2001. "Market volatility and inequality in earnings: experimental evidence," Economics Letters, Elsevier, vol. 70(3), pages 363-368, March.
    11. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
    12. Ernst Fehr & Bettina Rockenbach, 2003. "Detrimental effects of sanctions on human altruism," Nature, Nature, vol. 422(6928), pages 137-140, March.
    13. 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.
    14. Suetens, S., 2003. "A Duopoly Experiment on Cooperative and Noncooperative R&D," Discussion Paper 2003-77, Tilburg University, Center for Economic Research.
    15. Belderbos, Rene & Carree, Martin & Diederen, Bert & Lokshin, Boris & Veugelers, Reinhilde, 2004. "Heterogeneity in R&D cooperation strategies," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1237-1263, November.
    16. 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.
    17. Suetens, Sigrid, 2005. "Cooperative and noncooperative R&D in experimental duopoly markets," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 63-82, February.
    18. W. Salant, Stephen & Shaffer, Greg, 1998. "Optimal asymmetric strategies in research joint ventures," International Journal of Industrial Organization, Elsevier, vol. 16(2), pages 195-208, March.
    19. Andrew Brod & Ram Shivakumar, 1997. "R&D Cooperation and the Joint Exploitation of R&D," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 673-684, August.
    20. Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
    21. Huck, Steffen & Normann, Hans-Theo & Oechssler, Jorg, 2004. "Two are few and four are many: number effects in experimental oligopolies," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 435-446, April.
    22. SUETENS, Sigrid, 2003. "Voluntary R&D cooperation in experimental duopoly markets," Working Papers 2003029, University of Antwerp, Faculty of Business and Economics.
    23. Jeroen Hinloopen, 2003. "R&D Efficiency Gains Due to Cooperation," Journal of Economics, Springer, vol. 80(2), pages 107-125, October.
    24. Cason, Timothy N & Mason, Charles F, 1999. "Information Sharing and Tacit Collusion in Laboratory Duopoly Markets," Economic Inquiry, Western Economic Association International, vol. 37(2), pages 258-281, April.
    25. Keser, Claudia, 2000. "Cooperation in symmetric duopolies with demand inertia," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 23-38, January.
    26. Henriques, Irene, 1990. "Cooperative and Noncooperative R&D in Duopoly with Spillovers: Comment," American Economic Review, American Economic Association, vol. 80(3), pages 638-640, June.
    27. Petit, Maria Luisa & Tolwinski, Boleslaw, 1999. "R&D cooperation or competition?," European Economic Review, Elsevier, vol. 43(1), pages 185-208, January.
    28. Nicholas S. Vonortas, 2000. "Multimarket contact and inter-firm cooperation in R&D," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 243-271.
    29. Isaac, R. Mark & Reynolds, Stanley S., 1992. "Schumpeterian competition in experimental markets," Journal of Economic Behavior & Organization, Elsevier, vol. 17(1), pages 59-100, January.
    30. Hinloopen, Jeroen, 2000. "Strategic R&D Co-operatives," Research in Economics, Elsevier, vol. 54(2), pages 153-185, June.
    31. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    32. Cason, Timothy N., 1995. "Cheap talk price signaling in laboratory markets," Information Economics and Policy, Elsevier, vol. 7(2), pages 183-204, June.
    33. Kaiser, Ulrich, 2002. "An empirical test of models explaining research expenditures and research cooperation: evidence for the German service sector," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 747-774, June.
    Full references (including those not matched with items on IDEAS)

    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. Meickmann, Felix C., 2023. "Cooperation in knowledge sharing and R&D investment," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 146-164.
    2. Suetens, Sigrid, 2005. "Cooperative and noncooperative R&D in experimental duopoly markets," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 63-82, February.
    3. Cary Deck & Nisvan Erkal, 2013. "An Experimental Analysis Of Dynamic Incentives To Share Knowledge," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1622-1639, April.
    4. Cellini, Roberto & Lambertini, Luca, 2009. "Dynamic R&D with spillovers: Competition vs cooperation," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 568-582, March.
    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. Hinloopen, J. & Smrkolj, G. & Wagener, F.O.O., 2013. "In Defense of Trusts: R&D Cooperation in Global Perspective," CeNDEF Working Papers 13-05, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    7. 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.
    8. Silipo, Damiano B., 2008. "Incentives and forms of cooperation in research and development," Research in Economics, Elsevier, vol. 62(2), pages 101-119, June.
    9. Suetens, S., 2003. "A Duopoly Experiment on Cooperative and Noncooperative R&D," Other publications TiSEM 2ac403ea-a25e-496b-a6b3-a, Tilburg University, School of Economics and Management.
    10. Ruble, Richard & Versaevel, Bruno, 2014. "Market shares, R&D agreements, and the EU block exemption," International Review of Law and Economics, Elsevier, vol. 37(C), pages 15-25.
    11. Bourreau, Marc & Doğan, Pınar & Manant, Matthieu, 2016. "Size of RJVs with partial cooperation in product development," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 77-106.
    12. 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.
    13. Neubecker, Leslie, 2003. "Does cooperation in manufactoring foster tacit collusion," Tübinger Diskussionsbeiträge 261, University of Tübingen, School of Business and Economics.
    14. Marie‐Laure Cabon‐Dhersin & Romain Gibert, 2020. "R&D cooperation, proximity and distribution of public funding between public and private research sectors," Manchester School, University of Manchester, vol. 88(6), pages 773-800, December.
    15. Kaiser, Ulrich, 2002. "An empirical test of models explaining research expenditures and research cooperation: evidence for the German service sector," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 747-774, June.
    16. Shinji Kobayashi, 2015. "On a Dynamic Model of Cooperative and Noncooperative R and D in Oligopoly with Spillovers," Dynamic Games and Applications, Springer, vol. 5(4), pages 599-619, December.
    17. Buccella, Domenico & Fanti, Luciano & Gori, Luca, 2021. "A contribution to the theory of R&D investments," GLO Discussion Paper Series 940, Global Labor Organization (GLO).
    18. Amoroso, S., 2013. "Heterogeneity of innovative, collaborative, and productive firm-level processes," Other publications TiSEM f5784a49-7053-401d-855d-1, Tilburg University, School of Economics and Management.
    19. Antonio Tesoriere, 2015. "Competing R&D joint ventures in Cournot oligopoly with spillovers," Journal of Economics, Springer, vol. 115(3), pages 231-256, July.
    20. Luckraz, Shravan, 2011. "R&D games in a Cournot duopoly with isoelastic demand functions: A comment," Economic Modelling, Elsevier, vol. 28(6), pages 2873-2876.

    More about this item

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    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:eee:jeborg:v:66:y:2008:i:3-4:p:822-836. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    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.