Product market objectives and the formation of research joint ventures
AbstractIn this paper we extend the existing literature on research and development (R&D) investments and research joint ventures (RJVs) in two important ways. First, we analyze and compare the case where firms collude in the product market to the benchmark case of competition in the output market. Second, we allow firms to form coalitions endogenously as a separate stage in the game. We develop profit functions that depend on the partition of firms into joint ventures and the nature of product competition between venture partners. Our results illustrate the restrictive nature of some assumptions made in the literature. Typically multiple RJVs of different sizes form in equilibrium. In general, RJVs should not be promoted if they entail product market collusion. Given the information available to policy-makers, it is unlikely that an R&D policy more refined than analyzing and allowing RJVs on a case-by-case basis is feasible. Copyright © 1999 John Wiley & Sons, Ltd.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 20 (1999)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, American Economic Association, vol. 75(1), pages 219-27, March.
- Fershtman, Chaim & Gandal, Neil, 1994.
International Journal of Industrial Organization, Elsevier,
Elsevier, vol. 12(2), pages 141-154, June.
- Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, Econometric Society, vol. 52(1), pages 101-21, January.
- Cassiman, Bruno, 2000.
"Research joint ventures and optimal R&D policy with asymmetric information,"
International Journal of Industrial Organization, Elsevier,
Elsevier, vol. 18(2), pages 283-314, February.
- Bruno Cassiman, 1994. "Research Joint Ventures and Optimal R&D Policy with Asymmetric Information," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1105, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Bruno Cassiman, 1994. "Research joint ventures and optimal R&D policy with asymmetric information," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 263, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 1997.
- Francis Bloch, 1995. "Endogenous Structures of Association in Oligopolies," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 537-556, Autumn.
- Schmalensee, Richard, 1987. "Competitive advantage and collusive optima," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 5(4), pages 351-367.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
661465000000000387, David K. Levine.
- Grossman, Gene M & Shapiro, Carl, 1986. "Research Joint Ventures: An Antitrust Analysis," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 2(2), pages 315-37, Fall.
- Sang-Seung Yi, 1998. "Endogenous Formation of Joint Ventures with Efficiency Gains," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 610-631, Autumn.
- Greenlee, P., 1999. "Endogenous Formation of Competitive Research Sharing Joint Ventures," Papers, U.S. Department of Justice - Antitrust Division 99-2, U.S. Department of Justice - Antitrust Division.
- De Bondt, Raymond & Veugelers, Reinhilde, 1991. "Strategic investment with spillovers," European Journal of Political Economy, Elsevier, Elsevier, vol. 7(3), pages 345-366, October.
- Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 18(7), pages 995-1012, October.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, National Bureau of Economic Research, Inc, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Poyago-Theotoky, Joanna, 1995. "Equilibrium and Optimal Size of a Research Joint Venture in an Oligopoly with Spillovers," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 43(2), pages 209-26, June.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis, .
"Cooperative and noncooperative R&D in duopoly with spillovers,"
CORE Discussion Papers RP, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE)
-823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, American Economic Association, vol. 78(5), pages 1133-37, December.
- Jacquemin, Alexis & Soete, Luc, 1994. "Co-operation in R&D, efficiency and European policy," European Review, Cambridge University Press, Cambridge University Press, vol. 2(01), pages 65-72, January.
- Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, American Economic Association, vol. 82(5), pages 1293-306, December.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.