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Research Joint Ventures And Product Innovation: Some Welfare Aspects

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  • Joanna Poyago-Theotoky

Abstract

This paper considers a model of horizontal and vertical product differentiation. Firms spending on R&D may improve the quality of their product. K&D cooperation in the fort11 of a RJV among a subset of innovating firms introduces the possibility of a much better product being produced relative to the case of non-cooperation in K&D. Given Bertrand competition in the product market the RJV sets a common price for the improved good. It is shown that. even under this extreme form of cooperation, there are clear instances where social welfare is enhanced relative to the non-cooperative outcome.

Suggested Citation

  • Joanna Poyago-Theotoky, 1997. "Research Joint Ventures And Product Innovation: Some Welfare Aspects," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(1), pages 51-73.
  • Handle: RePEc:taf:ecinnt:v:5:y:1997:i:1:p:51-73
    DOI: 10.1080/10438599700000007
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    Citations

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    Cited by:

    1. Reisinger, Markus & Ressner, Ludwig & Schmidtke, Richard & Thomes, Tim Paul, 2014. "Crowding-in of complementary contributions to public goods: Firm investment into open source software," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 78-94.
    2. Vivekananda Mukherjee & Shyama Ramani, 2011. "R&D cooperation in emerging industries, asymmetric innovative capabilities and rationale for technology parks," Theory and Decision, Springer, vol. 71(3), pages 373-394, September.
    3. Mukherjee, Vivekananda & Ramani, Shyama V., 2008. "R&D cooperation, asymmetric technological capabilities and rationale for technology parks," Dresden Discussion Paper Series in Economics 11/08, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    4. Versaevel, Bruno & de Villemeur, Étienne, 2003. "Conflict and Cooperation on R&D Markets," IDEI Working Papers 191, Institut d'Économie Industrielle (IDEI), Toulouse.
    5. Aikaterini KOKKINOU, 2010. "Economic growth, innovation and collaborative research and development activities," Management & Marketing, Economic Publishing House, vol. 5(1), Spring.

    More about this item

    Keywords

    Product innovation; horizontal and vertical differentiation; R&D cooperation; welfare comparison; J.E.L. Class. Nos.: 030; D43; L13;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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