Discussion Paper

No. 2013-41 | August 12, 2013
R&D Cooperation and Industry Cartelization

Abstract

The objective of this paper is to investigate the impact of R&D cooperation on cartel formation in the product market. The R&D investments that precede the production process are aimed at the reduction of the unit manufacturing costs, and could create positive externalities for the potential competitors. In contrast to the preceding literature, we assume that the competition between firms on the product market takes place according to the Stackelberg leadership model. For simplicity we focus on the case of duopoly. Numerical analysis shows that a closer cooperation at the R&D stage may strengthen the incentives to create a cartel in the product market.

JEL Classification

O31 L41 L13

Cite As

Jacek Prokop and Adam Karbowski (2013). R&D Cooperation and Industry Cartelization. Economics Discussion Papers, No 2013-41, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2013-41

Assessment



Comments and Questions


Anonymous - Referee Report 1
September 11, 2013 - 08:19

see attached file


Jacek Prokop - Response
January 22, 2014 - 19:32

see attached file


Anonymous - Referee Report 2
September 13, 2013 - 09:09

see attached file


Jacek Prokop - Response
January 22, 2014 - 19:43

see attached file