R&D Cooperation of Firms and the Cartelization of Industry Cover Image

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R&D Cooperation of Firms and the Cartelization of Industry

Author(s): Jacek Prokop, Adam Karbowski
Subject(s): Economy
Published by: Wydawnictwo Naukowe Uniwersytetu Szczecińskiego
Keywords: R&D cooperation of firms; cartelization of industry

Summary/Abstract: The main objective of this paper is to investigate the impact of R&D cooperation on cartel formation in the product market. The R&D expenditures 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 on the product market follows 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 strengthens the incentives to create a cartel in the product market, as well.

  • Issue Year: 28/2013
  • Issue No: 03 (1)
  • Page Range: 259-272
  • Page Count: 14
  • Language: Polish