Partner Selection in R&D Cooperation
AbstractIn this paper we extend the R&D cooperation model to asymmetric firms, focusing on the incentives for cooperating with firms characterized by different levels of efficiency. Three firms differentiated by their cost levels invest in cost-reducing R&D before competing in output. Firms may cooperate in R&D, which implies both R&D coordination and perfect information sharing. It is found that firms' preferences over whom to cooperate with depend on spillovers and on cost differences between firms. With low (high) spillovers, a firm prefers to cooperate with the most (least) efficient among the remaining firms. As the cost differential between firms increases, efficient (inefficient) firms prefer to cooperate with the most (least) efficient firm more often. For very high spillovers, a firm prefers to be excluded from R&D cooperation. The equilibrium configuration is that the most efficient firms cooperate for low spillovers, while all firms cooperate for intermediate spillovers. For high spillovers, the equilibrium is for all firms to cooperate when the cost differential is sufficiently low, but depends on the bargaining mechanism when the cost differential is high. The model constitutes a generalization of the standard R&D model with symmetric firms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 0503E.
Length: 29 pages
Date of creation: 2005
Date of revision:
Contact details of provider:
Postal: PO Box 450, Station A, Ottawa, Ontario, K1N 6N5
Phone: (613) 562-5753
Fax: (613) 562-5999
Web page: http://www.socialsciences.uottawa.ca/eco/eng/index.asp
More information through EDIRC
R&D cooperation; Research joint ventures; Asymmetric firms; R&D spillovers;
Other versions of this item:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gamal Atallah, 2003.
"Information sharing and the stability of cooperation in research joint ventures,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 12(6), pages 531-554.
- Atallah, G., 2000. "Information Sharing and the Stability of Cooperation in Research Joint Ventures," Cahiers de recherche 2000-17, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Gamal Atallah, 2000. "Information sharing and the stability of cooperation in research joint ventures," Industrial Organization 0004010, EconWPA, revised 20 Mar 2002.
- ATALLAH, Gamal, 2000. "Information Sharing and the Stability of Cooperation in Research Joint Ventures," Cahiers de recherche 2000-17, Universite de Montreal, Departement de sciences economiques.
- Gamal Atallah, 2000. "Information Sharing and the Stability of Cooperation in Research Joint Ventures," CIRANO Working Papers 2000s-53, CIRANO.
- Gamal Atallah, 2002. "Information Sharing and the Stability of Cooperation in Research Joint Ventures," Working Papers 0202EClassification-JEL: , University of Ottawa, Department of Economics.
- Kamien, Morton I & Zang, Israel, 1993. "Competing Research Joint Ventures," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 23-40, Spring.
- Reinhilde Veugelers & Katrien Kesteloot, 1996. "Bargained shares in joint ventures among asymmetric partners: Is the matthew effect catalyzing?," Journal of Economics, Springer, vol. 64(1), pages 23-51, February.
- Gamal Atallah, 2005. "R&D cooperation with asymmetric spillovers," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 919-936, August.
- Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
- Martin, Stephen & Scott, John T., 2000.
"The nature of innovation market failure and the design of public support for private innovation,"
Elsevier, vol. 29(4-5), pages 437-447, April.
- Stephen Martin & John T. Scott, 1999. "The Nature of Innovation Market Failure and the Design of Public Support for Private Innovation," CIE Discussion Papers 1999-02, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Karolina Ekholm & Johan Torstensson, 1997.
"High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 30(4), pages 1184-1203, November.
- Ekholm, Karolina & Torstensson, Johan, 1996. "High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach," Working Paper Series 467, Research Institute of Industrial Economics.
- Poyago-Theotoky, Joanna, 1998. "R&D Competition in a Mixed Duopoly under Uncertainty and Easy Imitation," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 415-428, September.
- Christine Halmenschlager, 2004.
"R&D-cooperating laggards versus a technological leader,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 13(8), pages 717-732.
- C. Halmenschlager, 2003. "R&D-Cooperating Lagards versus a Technological Leader," Working Papers ERMES 0308, ERMES, University Paris 2.
- Minoru Kitahara & Toshihiro Matsumura, 2006. "Realized Cost-Based Subsidies For Strategic R&D Investments With "Ex Ante" And "Ex Post" Asymmetries," The Japanese Economic Review, Japanese Economic Association, vol. 57(3), pages 438-448.
- Röller, Lars-Hendrik & Siebert, Ralph & Tombak, Mihkel, 1997.
"Why Firms Form Research Joint Ventures: Theory and Evidence,"
CEPR Discussion Papers
1654, C.E.P.R. Discussion Papers.
- Lars-Hendrik Röller & Mikhel M. Tombak & Ralph Siebert, 1997. "Why Firms Form Research Joint Ventures: Theory and Evidence," CIG Working Papers FS IV 97-06, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG), revised Oct 1997.
- Petrakis, Emmanuel & Poyago-Theotoky, Joanna, 2002. "R&D Subsidies versus R&D Cooperation in a Duopoly with Spillovers and Pollution," Australian Economic Papers, Wiley Blackwell, vol. 41(1), pages 37-52, March.
- Poyago-Theotoky, Joanna, 1995. "Equilibrium and Optimal Size of a Research Joint Venture in an Oligopoly with Spillovers," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 209-26, June.
- Yi, Sang-Seung & Shin, Hyukseung, 2000. "Endogenous formation of research coalitions with spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 229-256, February.
- Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
- Lakdawalla, Darius & Sood, Neeraj, 2004. "Social insurance and the design of innovation incentives," Economics Letters, Elsevier, vol. 85(1), pages 57-61, October.
- Antonello Zanfei, 1994. "Technological alliances between weak and strong firms : coopérative ventures with asymmetric compétences," Revue d'Économie Industrielle, Programme National Persée, vol. 67(1), pages 255-280.
- Snyder, Christopher M. & Vonortas, Nicholas S., 2005. "Multiproject contact in research joint ventures: evidence and theory," Journal of Economic Behavior & Organization, Elsevier, vol. 58(4), pages 459-486, December.
- Thomas, Charles J., 2004. "The competitive effects of mergers between asymmetric firms," International Journal of Industrial Organization, Elsevier, vol. 22(5), pages 679-692, May.
- Barba Navaretti, Giorgio & Bussoli, Patrizia & Ulph, David & von Graevenitz, Georg, 2002. "Information Sharing, Research Co-Ordination and Membership of Research Joint Ventures," CEPR Discussion Papers 3134, C.E.P.R. Discussion Papers.
- Fauli-Oller, Ramon, 2002. "Mergers between Asymmetric Firms: Profitability and Welfare," Manchester School, University of Manchester, vol. 70(1), pages 77-87, January.
- Roijakkers, Nadine & Hagedoorn, John & van Kranenburg, Hans, 2005. "Dual market structures and the likelihood of repeated ties - evidence from pharmaceutical biotechnology," Research Policy, Elsevier, vol. 34(2), pages 235-245, March.
- Klette, T.J. & Moen, J. & Griliches, Z., 1999. "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconometric Evaluation Studies," Papers 16/99, Norwegian School of Economics and Business Administration-.
- Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 111-148.
- repec:ebl:ecbull:v:12:y:2005:i:18:p:1-11 is not listed on IDEAS
- Gamal Atallah, 2005. "Research Joint Ventures Cartelization with Asymmetric R&D Spillovers," Economics Bulletin, AccessEcon, vol. 12(18), pages 1-11.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Diane Ritchot).
If references are entirely missing, you can add them using this form.