EMISSION TAXES, CLEAN TECHNOLOGY COOPERATION, AND PRODUCT MARKET COLLUSION: EXPERIMENTAL EVIDENCE

Soo Keong Yong, Lana Friesen, Stuart McDonald

Research output: Journal PublicationArticlepeer-review

4 Citations (Scopus)

Abstract

We use a laboratory experiment to study the link between cooperative research and development (R&D) in clean technology and collusion in a downstream product market in the presence of a time-consistent emissions tax. Such a tax creates additional interconnections between firms, in addition to the standard technological spillovers. Our results show a strong link between R&D cooperation and market collusion under symmetric R&D spillovers in a duopoly, but when the spillovers are asymmetric, R&D cooperation does not necessarily result in collusion. With symmetric spillovers, the link between R&D cooperation and collusion remains strong even in three- and four-firm industries. (JEL C90, L5, O30, Q55).

Original languageEnglish
Pages (from-to)1950-1979
Number of pages30
JournalEconomic Inquiry
Volume56
Issue number4
DOIs
Publication statusPublished - Oct 2018
Externally publishedYes

ASJC Scopus subject areas

  • Business, Management and Accounting (all)
  • Economics and Econometrics

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