EconStor >
Heinrich-Heine-Universität Düsseldorf >
Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf >
DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/52685
  
Title:Entry deterrence through cooperative R&D over-investment PDF Logo
Authors:Christin, Clémence
Issue Date: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
Appears in Collections:DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)

Files in This Item:
File Description SizeFormat
675787912.pdf541.02 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/52685

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.