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Research Joint Ventures: A Barrier To Entry?

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  • Paul O'Sullivan

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    (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)

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    Abstract

    This paper examines a one-shot game where two symmetric incumbents are faced with possible entry into an industry, where firms may differ in the efficiency of R&D in reducing marginal production costs. The decision facing the incumbents is whether to compete at the R&D stage or to form a RJV. R&D competition may imply that remaining in the market is not viable for the incumbents and the entrant is a monopolist. Conversely, RJV formation may make entry unprofitable and, possibly, increase welfare. The effect on welfare will depend on whether output is exported in its entirety or consumed domestically.

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    Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n246-13.pdf.

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    Length: 31 pages
    Date of creation: 2013
    Date of revision:
    Handle: RePEc:may:mayecw:n246-13.pdf

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    1. Neary, J.P. & O'Sullivan, P., 1998. "Beat'Em Or Join'Em? Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets," Papers 98/10, College Dublin, Department of Political Economy-.
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