I study stable structures of efficiency-enhancing joint ventures among symmetric firms. Efficiency gains that accrue to a joint venture are assumed to increase with its size. The socially efficient industrywide joint venture is the stable outcome when membership of a joint venture is open to outside firms, but typically not when membership can be restricted. Members of a large joint venture want to restrict membership for strategic reasons -- e.g., in order to keep rival firms' costs high. Side payments among firms do not eliminate the strategic incentives of members of a large joint venture to limit membership
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Volume (Year): 29 (1998) Issue (Month): 3 (Autumn) Pages: 610-631 Download reference. The following formats are available: HTML
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S. Goyal & J.L. Moraga, 2000.
"R&D Networks,"
Econometric Institute Report
202, Erasmus University Rotterdam, Econometric Institute.
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Goyal, Sanjeev & Moraga-Gonzalez, Jose Luis, 2001.
"R&D Networks,"
RAND Journal of Economics,
The RAND Corporation, vol. 32(4), pages 686-707, Winter.