Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/52685
Authors: 
Christin, Clémence
Year of Publication: 
2011
Series/Report no.: 
DICE discussion paper 38
Abstract: 
In this paper, we highlight new conditions under which R&D agreements may have anti-competitive effects. We focus on cases where two firms compete with each other and with a competitive fringe. R&D activities need a specific input available to all firms on a common market, the price of which increases with demand for the input. In such a context, if a firm increases its R&D expenses, it increases the cost of R&D for its rivals. This induces exit from the fringe and may increase the final price. Therefore, by contrast to the case where the cost of R&D for one firm is independent of its rivals' R&D decisions, cooperation between strategic firms on the upstream market may induce more R&D by strategic firms, in order to exclude firms from the fringe and increase the final price.
Subjects: 
Competition policy
Research and Development Agreements
Collusion
Entry deterrence
JEL: 
L13
L24
L41
ISBN: 
978-3-86304-037-6
Document Type: 
Working Paper

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