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R&D: To Compete or to Cooperate?

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  • Bernard Beaudreau

Abstract

This paper takes issue with the current view of R&D and industry structure according to which cooperation in R&D effort is Pareto improving over competition. We argue that this literature fails to capture the essence of the Western experience, and secondly, that it fails to capture the essence of R&D itself, namely as constituting a highly uncertain, multidimensional heuristic activity. Using a more suitable model of R&D, we reexamine the competition versus cooperation debate. We derive conditions under which competition dominates cooperation and vice versa. We submit that our approach and results better describe the U.S. and Western experience, than does the game-theoretic approach.

Suggested Citation

  • Bernard Beaudreau, 1996. "R&D: To Compete or to Cooperate?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(3), pages 173-186.
    • Handle: RePEc:taf:ecinnt:v:4:y:1996:i:3:p:173-186
    DOI: 10.1080/10438599600000007
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    References listed on IDEAS

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    1. Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(3), pages 441-463.
    2. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297-297.
    3. Herman C. Quirmbach, 1993. "R&D: Competition, Risk, and Performance," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 157-197, Summer.
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    Cited by:

    1. Ulrich Kaiser, 2002. "R&D Spillovers and Endogenous Absorptive Capacity," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(2), pages 286-303, June.
    2. Beaudreau, Bernard C., 2005. "Engineering and economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 211-220, June.
    3. Kaiser, Ulrich, 2000. "Research Cooperation and Research Expenditures with Endogenous Absorptive Capacity: Theory and Microeconometric Evidence for the German Service Sector," ZEW Discussion Papers 00-25, ZEW - Leibniz Centre for European Economic Research.
    4. Kaiser, Ulrich, 2002. "An empirical test of models explaining research expenditures and research cooperation: evidence for the German service sector," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 747-774, June.

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    More about this item

    Keywords

    R&D; competition; cooperation J.E.L. Codes: L1; O3;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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