Noncooperative versus cooperative R&D with endogenous spillover rates

Rabah Amir, Igor Evstigneev, John Wooders

Research output: Contribution to journalArticle

Abstract

This paper deals with a general version of a two-stage model of R&D and product market competition. We provide a thorough generalization of previous results on the comparative performance of noncooperative and cooperative R&D, dispensing in particular with ex-post firm symmetry and linear demand assumptions. We also characterize the structure of profit-maximizing R&D cartels where firms competing in a product market jointly decide R&D expenditure, as well as internal spillover, levels. We establish the firms would essentially always prefer extremal spillovers, and within the context of a standard specification, derive conditions for the optimality of minimal spillover.

Original languageEnglish (US)
Pages (from-to)183-207
Number of pages25
JournalGames and Economic Behavior
Volume42
Issue number2
DOIs
StatePublished - Feb 2003

Keywords

  • Endogenous spillovers
  • Oligopolistic R&D
  • R&D cartel
  • Research joint ventures

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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