R&D Returns, Market Structure and Research Joint Ventures
AbstractA two period R&D symmetric Cournot duopoly game with linear demand and costs is analysed under linear (or more general) returns to scale in process R&D. Subgame-perfect equilibrium may call for one firm to fully innovate while the other firm remains just as before. The outcome is a polar duopoly or monopoly (one firm endogenously exiting. Two RJV schemes are compared to the noncooperative solution. Due to built-in symmetry, a joint lab RJV does not always lead to the best performance. Nonetheless, whenever a joint lab innovates, it yields the highest welfare. Overall, our findings differ substantially from those based on strongly decreasing R&D returns and symmetric outcomes.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 1999-07.
Length: 20 pages
Date of creation: May 1999
Date of revision:
Publication status: Published in: Journal of Institutional and Theoretical Economics, 156(4), 583-598, 2000
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strategic R&D; dominated strategies; asymmetric equilibria; research joint venture;
Other versions of this item:
- Rabah Amir, 2000. "R&D Returns, Market Structure, and Research Joint Ventures," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(4), pages 583-, December.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
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- AMIR, Rabah & GARCIA, Filomena & KNAUFF, Malgorzata, 2006.
"Endogenous heterogeneity in strategic models: symmetry-breaking via strategic substitutes and nonconcavities,"
CORE Discussion Papers
2006008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Rabah Amir & Filomena Garcia & Malgorzata Knauff, 2006. "Endogenous Heterogeneity in Strategic Models: Symmetry-breaking via Strategic Substitutes and Nonconcavities," Working Papers Department of Economics 2006/29, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
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