We develop a model of R&D collaboration in which individual firms carry out in-house research on core activities and undertake bilateral joint projects on non-core activities with other firms. We develop conditions on the profit functions of the firm under which R&D investments in different projects of a firm are complementary. We show that this condition is met by standard price and quantity setting oligopoly models. We then study the relation between the number of joint projects and investments and profits. In this context, we identify a second aspect of complementarity: Equilibrium investments in in-house as well as in each joint project are increasing in the number of projects. However, we find that an increase in number of joint projects of all firms lowers collective profits, suggesting the presence of excessive incentives for conducting research. (JEL: L13, L14, L22, O31, O32) (c) 2008 by the European Economic Association.
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Volume (Year): 6 (2008) Issue (Month): 6 (December) Pages: 1309-1338 Download reference. The following formats are available: HTML
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Paper
Goyal, S. & Konovalov, A. & Moraga-Gonzalez, J.L., 2003.
"Hybrid R&D,"
Econometric Institute Report
EI 2003-34 Revision_Date:, Erasmus University Rotterdam, Econometric Institute.
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Sanjeev Goyal & Alexander Konovalov & Jose Luis Moraga-Gonzalez, 2003.
"Hybrid R&D,"
Economics Discussion Papers
564, University of Essex, Department of Economics.
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Find related papers by JEL classification: L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
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MAULEON, Ana & SEMPERE-MONERRIS, JosŽ & VANNETELBOSCH, Vincent J., 2004.
"R&D networks among unionized firms,"
CORE Discussion Papers
2004071, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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