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Cooperation in product development and process R&D between competitors

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  • Bourreau, Marc
  • Dogan, PInar

Abstract

In this paper, we first provide a simple framework for cooperation in product development between competitors. We put forward the trade-off between the benefits obtained through development cost-sharing and the cost of intensified competition due to reduced product differentiation, which implies that no-cooperation can be an equilibrium outcome. We allow for firms to cooperate partially, i.e., to develop some product components jointly, but not necessarily all components. This enables us to study the factors that may have an effect on the degree of cooperation in product development, both in the presence and in the absence of process R&D. We also analyze the interaction between cooperation decisions on product development and process R&D. By considering a direct link between the two, we show that the degree of cooperation in product development may adversely affect the intensity of cooperation in process R&D.

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  • Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
    • Handle: RePEc:eee:indorg:v:28:y:2010:i:2:p:176-190
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    Cited by:

    1. Dawid, H. & Kopel, M. & Kort, P.M., 2013. "R&D competition versus R&D cooperation in oligopolistic markets with evolving structure," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 527-537.
    2. Jeitschko Thomas D. & Zhang Nanyun, 2014. "Adverse Effects of Patent Pooling on Product Development and Commercialization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 14(1), pages 27-57, January.
    3. Bourreau, Marc & Dogan, Pinar & Manant, Matthieu, 2010. "Size of RJVs and Degree of Cooperation in Product Development," Working Paper Series rwp10-047, Harvard University, John F. Kennedy School of Government.
    4. Hoernig, Steffen & Cambini, Carlo, 2013. "Cooperative Investment, Uncertainty and Access," CEPR Discussion Papers 9376, C.E.P.R. Discussion Papers.
    5. 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.
    6. Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
    7. Bourreau, Marc & Doğan, Pınar & Manant, Matthieu, 2016. "Size of RJVs with partial cooperation in product development," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 77-106.
    8. Hoefele Andreas, 2016. "Process and Product Innovation and the Role of the Preference Function," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(4), pages 1-5, October.
    9. Thomas Jeitschko & Nanyun Zhang, 2011. "Patent Pools and Product Development," Working Papers 2011-02, Towson University, Department of Economics, revised Feb 2011.
    10. Kyung Hwan Baik & Sang-Kee Kim, 2020. "Observable versus unobservable R&D investments in duopolies," Journal of Economics, Springer, vol. 130(1), pages 37-66, June.
    11. Taehyun Ko & Jaeram Lee & Daehyeon Park & Doojin Ryu, 2023. "Supply chain transparency as a signal of ethical production," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1565-1573, April.
    12. Adam Karbowski & Jacek Prokop, 2018. "R&D activities of enterprises, product market leadership, and collusion," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 735-753.
    13. Dorn, Stefanie & Schweiger, Bastian & Albers, Sascha, 2016. "Levels, phases and themes of coopetition: A systematic literature review and research agenda," European Management Journal, Elsevier, vol. 34(5), pages 484-500.
    14. Ramsza Michał & Karbowski Adam, 2020. "Product R&D Coopetition and Firm Performance," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(2), pages 1-9, June.
    15. Eduard Gabriel Ceptureanu & Sebastian Ion Ceptureanu & Violeta Radulescu & Stefan Alexandru Ionescu, 2018. "What Makes Coopetition Successful? An Inter-Organizational Side Analysis on Coopetition Critical Success Factors in Oil and Gas Distribution Networks," Energies, MDPI, vol. 11(12), pages 1-20, December.
    16. Pun, Hubert & Ghamat, Salar, 2016. "The value of partnership under competition: When competitors may be R&D joint-venture and supply-chain partners for a critical component," International Journal of Production Economics, Elsevier, vol. 177(C), pages 1-11.
    17. Petal Jean Hackett, 2012. "Cutting too Close? Design Protection and Innovation in Fashion Goods," CESifo Working Paper Series 3716, CESifo.

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    More about this item

    Keywords

    Cooperation Product development Process R&D;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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