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

Soo Keong Yong; Lana Friesen; Stuart McDonald

doi:10.1111/ecin.12573

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

Soo Keong Yong, Lana Friesen, Stuart McDonald

Centre for Decision Research and Experimental Economics China

Research output: Journal Publication › Article › peer-review

9 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 language	English
Pages (from-to)	1950-1979
Number of pages	30
Journal	Economic Inquiry
Volume	56
Issue number	4
DOIs	https://doi.org/10.1111/ecin.12573
Publication status	Published - Oct 2018

ASJC Scopus subject areas

General Business,Management and Accounting
Economics and Econometrics

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10.1111/ecin.12573

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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).",

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AB - 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).

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

Abstract

ASJC Scopus subject areas

UN SDGs

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