Thursday, August 15, 2013
Posted by D. Daniel Sokol
Ricardo Flores-Fillol, Universitat Rovira i Virgili, Guiomar Ibanez-Zarate, Universitat Rovira i Virgili and Bernd Theilen, Centre de Recerca en Economia Industrial i Economia Publica have posted Domestic and International Research Joint Ventures: The Effect of Collusion.
ABSTRACT: We analyze the effect of research joint ventures (RJVs) on consumer welfare in an international context when collusion can occur. The main novelty of our analysis is to study the differentiated effect of domestic and international RJVs. The recent literature shows that RJVs with collusion harm consumers. However, our results introduce a qualification to this statement: international RJVs with collusion might be beneficial for consumers when internationalization costs are high. The EU and US competition policy advises against RJVs that facilitate collusion on the grounds of their expected negative effects. Our results suggest that antitrust authorities should distinguish between domestic and international RJVs and, in certain cases, be more benevolent with international RJVs.