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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

R&D Spillovers and Optimal Anti-Trust Enforcement

Vol.18, No.2, June , 61–83



  •   (Department of Economics, Chung-Ang University)

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Abstract  

Using a three-stage game model, this paper analyzes the optimal level of anti-trust enforcement against joint production in relation to the degree of R&D spillovers. It shows that the optimal level of anti-trust enforcement is negatively related to the magnitude of R&D spillovers. In particular, the government should show some tolerance of joint production cartels only when R&D spillovers are sufficient for firms to cooperate voluntarily in their R&D activities. When R&D spillovers are so weak that firms do not cooperate voluntarily in the R&D stage, the government should intensify anti-trust enforcement against joint production to a prohibitive level.


Keywords
   R&D, Spillovers, Cooperation, Anti-trust, Social Welfare

JEL classification codes
   L0, L1, L4, L5
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