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Research joint ventures and optimal R&D policy with asymmetric information

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  • Cassiman, Bruno

Abstract

When to allow Research Joint Ventures (RJVs) or not is an important instrument in the development of an optimal R&D policy. The regulator, however, is unlikely to know all the relevant information to regulate R&D optimally. The extent to which there exist appropriability problems between the firms is one such variable that is private information to the firms in the industry. In a duopoly setting we analyze the characteristics of a second-best R&D policy where the government can either allow RJVs or not and give lump-sum subsidies to the parties involved. The second-best R&D policy without subsidies will either block some welfare improving RJVs or allow some welfare reducing ones. With lump-sum subsidies, the second-best policy trades off the expected subsidy cost with allowing welfare decreasing RJVs or blocking welfare increasing ones.
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  • Cassiman, Bruno, 2000. "Research joint ventures and optimal R&D policy with asymmetric information," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 283-314, February.
  • Handle: RePEc:eee:indorg:v:18:y:2000:i:2:p:283-314
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    Cited by:

    1. Bruno Cassiman & Reinhilde Veugelers, 1998. "R&D cooperation and spillovers: Some empirical evidence," Economics Working Papers 328, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Jacek, Prokop & Adam, Karbowski, 2016. "Pozioma współpraca badawczo-rozwojowa a kartelizacja gałęzi
      [Horizontal R&D cooperation and market cartelization]
      ," MPRA Paper 73605, University Library of Munich, Germany.
    3. Chiara Conti & Marco A. Marini, 2017. "Are You the Right Partner ? R&D Agreement as a Screening Device," DIAG Technical Reports 2017-09, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    4. Chiara CONTI, 2013. "Asymmetric information in a duopoly with spillovers: new findings on the effects of RJVs," Departmental Working Papers 2013-04, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    5. Peitz, Martin & Shin, Dongsoo, 2013. "Innovation and waste in supply chain management," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 191-199.
    6. Karbowski, Adam, 2016. "Współpraca badawczo-rozwojowa przedsiębiorstw: przegląd prac empirycznych
      [R&D Cooperation of Firms: Empirical literature review]
      ," MPRA Paper 77698, University Library of Munich, Germany.
    7. Aikaterini KOKKINOU, 2010. "Economic growth, innovation and collaborative research and development activities," Management & Marketing, Economic Publishing House, vol. 5(1), Spring.
    8. Ouchida, Yasunori & Goto, Daisaku, 2016. "Environmental research joint ventures and time-consistent emission tax: Endogenous choice of R&D formation," Economic Modelling, Elsevier, vol. 55(C), pages 179-188.
    9. Ivano D'Antonio, 2015. "Cooperazione e spesa in R&S: evidenze empiriche dalla Community Innovation Survey," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2015(116), pages 90-110.
    10. Yasunori Ouchida & Daisaku Goto, 2014. "Environmental Research Joint Ventures and Time-Consistent Emission Tax," Working Papers 2014.35, Fondazione Eni Enrico Mattei.
    11. Patrick Greenlee & Bruno Cassiman, 1999. "Product market objectives and the formation of research joint ventures," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 115-130.
    12. Joanna Poyago-Theotoky, 1999. "A Note on Endogenous Spillovers in a Non-Tournament R & D Duopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(3), pages 253-262, November.
    13. Christine Heumesser, 2008. "Designing of research coalitions in promoting GEOSS. A brief overview of the literature," Working Papers 402008, Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Life Sciences, Vienna.

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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