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Dynamic R&D with Spillovers: Competition vs Cooperation

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  • R. Cellini
  • L. Lambertini

Abstract

We investigate dynamic R&D for process innovation in a duopoly where firms may either undertake independent ventures or form a cartel for cost-reducing R&D investments. By comparing the profit and welfare perfomances of the two settings in steady state, we show that private and social incentives towards R&D cooperation coincide for all admissible levels of the technological spillovers characterising innovative activity. This results stems from smoothing the investment reffort over the time horizon of the game.

Suggested Citation

  • R. Cellini & L. Lambertini, 2003. "Dynamic R&D with Spillovers: Competition vs Cooperation," Working Papers 495, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:495
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    References listed on IDEAS

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    Cited by:

    1. Jannett Highfill & Michael McAsey, 2013. "Welfare Measures in Dynamic Firm R&D Games," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 19(4), pages 439-449, November.
    2. Bernard, Sophie, 2011. "Remanufacturing," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 337-351.
    3. Roberto Cellini & Luigi Siciliani & Odd Rune Straume, "undated". "A dynamic model of quality competition with endogenous prices," NIPE Working Papers 8/2015, NIPE - Universidade do Minho.
    4. Hinloopen, Jeroen & Smrkolj, Grega & Wagener, Florian, 2013. "In Defense of Trusts: R&D Cooperation in Global Perspective," MPRA Paper 63551, University Library of Munich, Germany, revised 09 Apr 2015.
    5. Hasnas, Irina & Lambertini, Luca & Palestini, Arsen, 2014. "Open Innovation in a dynamic Cournot duopoly," Economic Modelling, Elsevier, vol. 36(C), pages 79-87.
    6. Hinloopen, Jeroen & Smrkolj, Grega & Wagener, Florian, 2013. "From mind to market: A global, dynamic analysis of R&D," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2729-2754.
    7. D. Dragone & L. Lambertini & G. Leitmann & A. Palestini, 2008. "Hamiltonian potential functions for differential games," Working Papers 644, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. 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.
    9. Bischi, Gian Italo & Lamantia, Fabio, 2012. "A dynamic model of oligopoly with R&D externalities along networks. Part I," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 84(C), pages 51-65.
    10. Luca Lambertini & Gianpaolo Rossini, 2009. "The Gains From Cooperative R&D With A Concave Technology And Spillovers," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 77-85.
    11. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2016. "R&D Cooperatives and Market Collusion: A Global Dynamic Approach," Tinbergen Institute Discussion Papers 16-048/II, Tinbergen Institute.
    12. Jannett Highfill & Michael McAsey, 2013. "Dynamic Firm R&D Games: Manufacturing Costs and Reliability Paths," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 1-14, February.
    13. Samano, Mario & Santugini, Marc & Zaccour, Georges, 2017. "Dynamics in research joint ventures and R&D collaborations," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 70-92.
    14. G. F. Gori & L. Lambertini, 2014. "Trade, externalities, and the impact of asymmetric information on trade policy," Working Papers wp930, Dipartimento Scienze Economiche, Universita' di Bologna.
    15. Duarte Leite & Pedro Campos & Isabel Mota, 2011. "Computational Results on Membership in R&D Cooperation Networks: To Be or Not To Be in a Research Joint Venture," FEP Working Papers 420, Universidade do Porto, Faculdade de Economia do Porto.
    16. Feichtinger, Gustav & Lambertini, Luca & Leitmann, George & Wrzaczek, Stefan, 2016. "R&D for green technologies in a dynamic oligopoly: Schumpeter, arrow and inverted-U’s," European Journal of Operational Research, Elsevier, vol. 249(3), pages 1131-1138.
    17. repec:nip:nipewp:08/2015 is not listed on IDEAS
    18. Roberto Cellini & Luca Lambertini, 2011. "R&D Incentives Under Bertrand Competition: A Differential Game," The Japanese Economic Review, Japanese Economic Association, vol. 62(3), pages 387-400, September.
    19. R. Cellini & L. Lambertini, 2004. "R&D Incentives and Market Structure: A Dynamic Analysis," Working Papers 497, Dipartimento Scienze Economiche, Universita' di Bologna.
    20. repec:kap:iaecre:v:19:y:2013:i:4:p:439-449 is not listed on IDEAS
    21. Pan, Xiaojun & Li, Shoude, 2016. "Dynamic optimal control of process–product innovation with learning by doing," European Journal of Operational Research, Elsevier, vol. 248(1), pages 136-145.
    22. Dawid, Herbert & Keoula, Michel Y. & Kopel, Michael & Kort, Peter M., 2015. "Product innovation incentives by an incumbent firm: A dynamic analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 411-438.
    23. Li, Shoude & Ni, Jian, 2016. "A dynamic analysis of investment in process and product innovation with learning-by-doing," Economics Letters, Elsevier, vol. 145(C), pages 104-108.

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