COOPERATION SPILLOVERS AND PRICE COMPETITION IN EXPERIMENTAL MARKETS.

Firms often cooperate explicitly through activities such as research joint ventures, while competing in other markets. Cooperation in research and development can allow firms to internalize the external benefits of knowledge creation and increase the returns from research and development (R&D) expen...

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Publicado en:Economic Inquiry Vol. 51; no. 3; pp. 1715 - 1731
Autores principales: CASON, TIMOTHY N., GANGADHARAN, LATA
Formato: Artículo
Publicado: Wiley-Blackwell Jul2013
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Acceso en línea:Ver este registro en EBSCOhost
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        10.1111/j.1465-7295.2012.00486.x
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        atl: COOPERATION SPILLOVERS AND PRICE COMPETITION IN EXPERIMENTAL MARKETS.
      aug:
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          CASON, TIMOTHY N.
          GANGADHARAN, LATA
        affil:
          Cason: DepartmENt of Economics, Purdue University, 100 S. Grant Street, West Lafayette, IN 47907 ‐ 2076. Phone 765 ‐ 494 ‐ 1737, Fax 765 ‐ 494 ‐ 9658, E ‐ mail
          Gangadharan: DepartmENt of Economics, Monash University, Clayton Campus, Victoria, Australia. Phone +61 3 9905 2345, Fax +61 3 9905 5476, E ‐ mail
      su:
        Externalities
        Cooperation
        Markets
        Economic competition
        Economics
        Joint ventures
        Research & development
      sug:
        subj:
          Externalities
          Cooperation
          Markets
          Economic competition
          Economics
          Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
          Research and Development in Biotechnology
          Joint ventures
          Research & development
      ab: Firms often cooperate explicitly through activities such as research joint ventures, while competing in other markets. Cooperation in research and development can allow firms to internalize the external benefits of knowledge creation and increase the returns from research and development (R&D) expenditures. Such cooperation may spill over to facilitate collusion in the market, however, potentially lowering welfare and efficiency. This paper uses a laboratory experiment to examine if sellers successfully coordinate to fund a joint research project to reduce their costs, and how this collaboration affects their pricing behavior. The experiment includes control treatments with separate R&D cooperation and markets. Our results show that although participants usually cooperate when given an opportunity, cooperation is observed less frequently when they also compete in the market. Communication improves cooperation in all environments, particularly when the market is present. Nevertheless, the data provide no evidence of seller collusion in the market. ( JEL D43, D71, H40, O3)
      pubtype: Academic Journal
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    language: English
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