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Unpublished Paper
In defence of trusts: R&D cooperation in global perspective
Tinbergen Institute Doiscussion Paper (2014)
  • Jeroen Hinloopen
  • Grega Smrkolj
  • Florian Wagener, University of Amsterdam
Abstract

We 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 show that an extension of the cooperative agreement in R&D towards collusion in the product market is not necessarily welfare reducing: if firms collude, they (i) develop further a wider range of initial technologies, (ii) invest more in R&D such that process innovations are pursued more quickly, and (iii) abandon the technology for a smaller set of initial marginal costs. We also discuss the implications of our analysis for antitrust policy.

Keywords
  • Antitrust policy,
  • Bifurcations,
  • Collusion,
  • R&D Cooperatives
Publication Date
March, 2014
Citation Information
Jeroen Hinloopen, Grega Smrkolj and Florian Wagener. "In defence of trusts: R&D cooperation in global perspective" Tinbergen Institute Doiscussion Paper (2014)
Available at: http://works.bepress.com/hinloopen/4/