Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Thursday, October 15, 2009

Do research joint ventures serve a collusive function?

Posted by D. Daniel Sokol

Michelle S. Goeree (University of Zurich and the University of Southern California) and Eric Helland (Claremont McKenna College and RAND) ask Do research joint ventures serve a collusive function?

ABSTRACT: Every year thousands of firms are engaged in research joint ventures (RJV), where all knowledge gained through R&D is shared among members. Most of the empirical literature assumes members are non-cooperative in the product market. But many RJV members are rivals leaving open the possibility that firms may form RJVs to facilitate collusion. We exploit variation in RJV formation generated by a policy change that affects the collusive benefits but not the research synergies associated with an RJV. We estimate an RJV participation equation and find the decision to join is impacted by the policy change. Our results are consistent with research joint ventures serving a collusive function.

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