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Endogenous technology sharing in R&D intensive industries

  • Clark, Derek J.
  • Sand, Jan Yngve

This paper analyses endogenous formation of technology sharing coalitions with asymmetric firms. Coalition partners produce complementary technology advancements, although firms do not co-operate on R&D investment level or in the product market. The equilibrium coalition outcome is either between the two most efficient firms, or a coalition with all three firms. The two-firm coalition is the preferred outcome of a welfare maximising authority if ex ante marginal cost is sufficiently high, and the threefirm coalition is preferred otherwise. Furthermore, we show that the equilibrium outcomes result in the lowest total R&D investment of all possible outcomes. Aircraft engine manufacturing provides a case study, and indicates the importance of antitrust issues as an addition to the theory.

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File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2010-1
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File URL: https://www.econstor.eu/bitstream/10419/29632/1/616556527.pdf
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Article provided by Kiel Institute for the World Economy (IfW) in its journal Economics: The Open-Access, Open-Assessment E-Journal.

Volume (Year): 4 (2010)
Issue (Month): ()
Pages: 1-48

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Handle: RePEc:zbw:ifweej:20101
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