EMISSION TAXES,CLEAN TECHNOLOGY COOPERATION,AND PRODUCT MARKET COLLUSION: EXPERIMENTAL EVIDENCE |
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| Authors: | Soo Keong Yong Lana Friesen Stuart McDonald |
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| Affiliation: | 1. +86 0512 88166532+86 0512 88161899;2. Lecturer, International Business School Suzhou, Xi'an Jiaotong‐Liverpool University, Suzhou, People's Republic of China;3. +61 7 33656564+61 7 33657299;4. Associate Professor, School of Economics, The University of Queensland, Brisbane, QLD, Australia |
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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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