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Information Sharing and the Stability of Cooperation in Research Joint Ventures

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  • Gamal Atallah

Abstract

The model studies information sharing and the stability of cooperation in cost reducing Research Joint Ventures (RJVs). In a three-stage game-theoretic framework, firms decide on participation in a RJV, information sharing along with R&D expenditures, and output. An important feature of the model is that voluntary information sharing between cooperating firms increases information leakage from the RJV to outsiders. It is found that RJVs representing a larger portion of firms in the industry are more likely to share information. It is also found that when sharing information is costless, firms generally don't choose intermediate levels of information sharing: they share all the information or none at all. The size of the RJV is found to depend on three effects: a coordination effect, an information sharing effect, and a competition effect. Depending on the relative magnitudes of these effects, the size of the RJV may increase or decrease with spillovers. In response to an increase in leakages, RJV members reduce their R&D spending. In addition, they either increase the RJV size while maintaining information sharing unchanged (when leakages are low), or they reduce both information sharing and RJV size (when leakages are high). The effect of information sharing on the profitability of firms as well as on welfare is studied. Le partage d'information et la stabilité de la coopération dans les consortiums de recherche. Cet article examine le partage de technologie et la stabilité de la coopération dans les consortiums de recherche (RJVs) dont le but est la réduction des coûts de production. Dans un jeu à trois étapes, les firmes prennent des décisions quant à leur participation à la RJV, au partage d'information et aux dépenses en R&D, et à leur output. Une caractéristique importante du modèle est que le partage volontaire d'information au sein de la RJV augmente les fuites d'information vers les non-membres. On montre que les RJVs représentant une plus grande proportion des firmes dans l'industrie ont davantage tendance à partager l'information. Lorsqu'il n'en coûte rien de partager l'information, les firmes ne choisissent pas des niveaux intermédiaires de partage d'information: l'information est partagée au complet ou pas du tout. La taille de la RJV dépend de trois effets: un effet de coordination, un effet d'information et un effet de concurrence. Dépendamment de l'importance relative de ces trois effets, la taille de la RJV peut augmenter ou diminuer avec les externalités. Lorsque les fuites d'information vers les non-membres augmentent, les membres de la RJV réduisent leurs dépenses en R&D. De plus, soit qu'ils augmentent la taille de la RJV en maintenant le partage d'information (lorsque les externalités sont faibles), soit qu'ils réduisent la taille de la RJV et le partage d'information (lorsque les externalités sont élevées). L'effet du partage d'information sur la profitabilité des firmes ainsi que sur le bien-être est examiné.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2000s-53.

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Date of creation: 01 Nov 2000
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Handle: RePEc:cir:cirwor:2000s-53

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Keywords: Endogenous R&D spillovers; information sharing; R&D cooperation; research joint ventures; Externalités de recherche endogènes; partage d'information; coopération en R&D; consortiums de recherche;

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Citations

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Cited by:
  1. Werner Bönte & Lars Wiethaus, 2007. "Knowledge Disclosure and Transmission in Buyer–Supplier Relationships," Review of Industrial Organization, Springer, vol. 31(4), pages 275-288, December.
  2. Gamal Atallah, 2004. "The Protection of Innovations," CIRANO Working Papers 2004s-02, CIRANO.
  3. Duarte Leite & Pedro Campos & Isabel Mota, 2011. "Computational Results on Membership in R&D Cooperation Networks: To Be or Not To Be in a Research Joint Venture," FEP Working Papers 420, Universidade do Porto, Faculdade de Economia do Porto.
  4. Gamal Atallah, 2004. "The Allocation of Resources to Cooperative and Noncooperative R&D," Working Papers 0403E, University of Ottawa, Department of Economics.
  5. Werner Bönte & Lars Wiethaus, 2005. "Knowledge Transfer in Buyer-Supplier Relationships – When It (Not) Occurs," RWI Discussion Papers 0034, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  6. Gamal Atallah, 2000. "Information sharing and the stability of cooperation in research joint ventures," Industrial Organization 0004010, EconWPA, revised 20 Mar 2002.
  7. Craig Boardman & Barry Bozeman, 2006. "Implementing a 'bottom-up,' multi-sector research collaboration: The case of the Texas air quality study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(1), pages 51-69.
  8. SUETENS, Sigrid, 2004. "Literature review: R&D cooperation in oligopoly with spillovers: An experimental economics approach," Working Papers 2004024, University of Antwerp, Faculty of Applied Economics.
  9. Gamal Atallah, 2005. "Partner Selection in R&D Cooperation," CIRANO Working Papers 2005s-24, CIRANO.

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