Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/162286 
Year of Publication: 
2017
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 17-020/VII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We present a continuous-time generalization of the seminal R&D model of d'Aspremont and Jacquemin (The American Economic Review 78(5): 1133–1137, 1988) to examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market collusion. We consider all trajectories that are candidates for an optimal solution as well as initial marginal cost levels that exceed the choke price. Firms that collude develop further a wider range of initial technologies, pursue innovations more quickly, and are less likely to abandon a technology. Product market collusion could thus yield higher total surplus.
Subjects: 
Antitrust policy
Bifurcations
Collusion
R&D cooperatives
Spillovers
JEL: 
D43
D92
L13
L41
O31
O38
Document Type: 
Working Paper

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