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To Reveal or Not to Reveal - The Case of Research Joint Ventures with Two-Sided Incomplete Information

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  • Rosenkranz, Stephanie

Abstract

Firms' incentives to form research joint ventures (RJVs) are analysed in an incomplete information framework when technological know-how is private information. Firms first decide on cooperation and information revelation and then compete for a patent. Provided that spillovers exist in the case of unilateral revelation of know-how, it can be shown that non-cooperation is always an equilibrium. If competition is in a second-price auction with positive minimum R&D requirements this equilibrium is unique for high spillovers. Cooperation can occur for low spillovers. For certain parameters there exists an equilibrium in which only firms with low know-how cooperate.

Suggested Citation

  • Rosenkranz, Stephanie, 1998. "To Reveal or Not to Reveal - The Case of Research Joint Ventures with Two-Sided Incomplete Information," CEPR Discussion Papers 1985, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1985
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    More about this item

    Keywords

    Incomplete Information; Research Joint Ventures; second-price auction; Spillovers;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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