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Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf >
DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE) >
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http://hdl.handle.net/10419/67332
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| Title: | | Collusion through joint R&D: An empirical assessment  |
| Authors: | | Duso, Tomaso Röller, Lars-Hendrik Seldeslachts, Jo |
| Issue Date: | | 2012 |
| Series/Report no.: | | DICE Discussion Paper 79 |
| Abstract: | | This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an oligopolistic setting where firms enter in research joint ventures (RJVs) to lower production costs or coordinate on collusion in the product market. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of RJV-participating firms, which is also necessary and sufficient for a decrease in consumer welfare. Using information from the U.S. National Cooperation Research Act, we estimate a market share equation correcting for the endogeneity of RJV participation and R&D expenditures. We find robust evidence that large networks between direct competitors - created through firms being members in several RJVs at the same time - are conducive to collusive outcomes in the product market which reduce consumer welfare. By contrast, RJVs among non-competitors are efficiency enhancing. |
| Subjects: | | Research Joint Ventures Innovation Collusion NCRA |
| JEL: | | K21 L24 L44 D22 O32 |
| ISBN: | | 978-3-86304-078-9 |
| Document Type: | | Working Paper |
| Appears in Collections: | | DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)
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