Document Type

Report

Publication Date

3-1991

Number

26

Abstract

Anticipated post-innovation collusion encourages R&D effort, but realized collusion later yields deadweight losses. In balancing this trade-off, Bertrand industries sometimes outperform Cournot; sometimes not. Both usually out perform perfectly collusive industries. The optimal level of collusion is often less collusive than Cournot duopoly...

Published As

This report has been published in The RAND Journal of Economics- Vol. 24, No. 2 (Summer, 1993), pp. 157-197