Effects of one-way spillovers on market shares, industry price, welfare, and R & D cooperation

Rabah Amir, John Wooders

Research output: Contribution to journalArticle

Abstract

With one-way spillovers, the standard symmetric two-period R & D model leads to an asymmetric equilibrium only, with endogeneous innovator and imitator roles. We show how R & D decisions and measures affirm heterogeneity - market shares, R & D shares, and profits - depend on spillovers and on R & D costs. While a joint lab always improves on consumer welfare, it yields higher profits, cost reductions, and social welfare only under extra assumptions, beyond those required with multidirectional spillovers. Finally, the novel issue of optimal R & D cartels is addressed. We show an optimal R & D cartel may seek to minimize R & D spillovers between its members.

Original languageEnglish (US)
Pages (from-to)223-249
Number of pages27
JournalJournal of Economics and Management Strategy
Volume8
Issue number2
DOIs
StatePublished - 1999

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation

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