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R&D COOPERATION BETWEEN IMPATIENT RIVALS
Author(s) -
Yao Zhiyong,
Zheng Bingyong
Publication year - 2016
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/boer.12037
Subject(s) - collusion , competitor analysis , microeconomics , product (mathematics) , imperfect , economics , industrial organization , repeated game , business , product market , monetary economics , game theory , incentive , management , linguistics , philosophy , geometry , mathematics
We analyse R&D cooperation between product‐market competitors within a repeated‐game framework with imperfect monitoring. When firms are patient enough, R&D cooperation is attainable without product‐market collusion. However, if firms are less patient, we show that collusion in the product market is necessary to sustain R&D cooperation. Moreover, consumers can be better off when collusion is allowed in this case.