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Information Sharing and the Stability of Cooperation in Research Joint Ventures

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  • Gamal Atallah

    ()
    (Department of Economics, University of Ottawa)

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.

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Bibliographic Info

Paper provided by University of Ottawa, Department of Economics in its series Working Papers with number 0202EClassification-JEL: L13, 032.

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Length: 39 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:ott:wpaper:0202e

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Keywords: Endogenous R&D spillovers; Information sharing; R&D cooperation; Research Joint Ventures;

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References

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Citations

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Cited by:
  1. Gamal Atallah, 2000. "Information sharing and the stability of cooperation in research joint ventures," Industrial Organization 0004010, EconWPA, revised 20 Mar 2002.
  2. Gamal Atallah, 2005. "Partner Selection in R&D Cooperation," Working Papers 0503E, University of Ottawa, Department of Economics.
  3. Abiodun Egbetokun & Ivan Savin, 2012. "Absorptive Capacity and Innovation: When Is It Better to Cooperate?," Jena Economic Research Papers 2012-056, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. 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.
  5. 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.
  6. Gamal Atallah, 2004. "The Allocation of Resources to Cooperative and Noncooperative R&D," Working Papers 0403E, University of Ottawa, Department of Economics.
  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. Gamal Atallah, 2004. "The Protection of Innovations," CIRANO Working Papers 2004s-02, CIRANO.
  9. 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.
  10. Werner Bönte & Lars Wiethaus, 2005. "Knowledge Transfer in Buyer-Supplier Relationships – When It (Not) Occurs," RWI Discussion Papers 0034, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.

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