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The Gains From Cooperative R&D With A Concave Technology And Spillovers

  • LUCA LAMBERTINI

    ()

    (Department of Economics, University of Bologna, Strada Maggiore 45, 40125 Bologna, Italy)

  • GIANPAOLO ROSSINI

    ()

    (Department of Economics, University of Bologna, Strada Maggiore 45, 40125 Bologna, Italy)

We reassess the respective gains from R&D cooperation and competition in a Cournot duopoly where firms adopt a concave cost-reducing R&D technology. Cooperation, in the form of either a cartel or a joint venture, is always profitable for firms and, contrary to the previous literature on the same topic, (i) no corner solutions emerge and (ii) R&D cooperation is socially superior to independent ventures for any spillover level, provided the cost of R&D financing is sufficiently high.

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Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.

Volume (Year): 11 (2009)
Issue (Month): 01 ()
Pages: 77-85

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Handle: RePEc:wsi:igtrxx:v:11:y:2009:i:01:p:77-85
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