In an extended version of d'Aspremont and Jacquemin's (1988) R&D competition model we find a region where the game is a prisoner's dilemma: firms still invest in R&D but they would obtain a higher profit by not investing at all. In a repeated version of the game, we prove that firms implicitly tend to collude and refrain from investing in R&D, thus decreasing social welfare. When this happens, inviting firms to form a joint venture appears as a remedy to the lack of innovation efforts rather than the excess thereof.
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- Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
- Kotaro Suzumura, 1990. "Cooperative and Non-cooperative R&D in Oligopoly with Spillovers," Discussion Paper Series a218, Institute of Economic Research, Hitotsubashi University.
- d'Aspremont, Claude & Jacquemin, Alexis, 1990.
"Cooperative and Noncooperative R&D in Duopoly with Spillovers: Erratum,"
American Economic Review,
American Economic Association, vol. 80(3), pages 641-42, June.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis, . "Cooperative and noncooperative R&D in duopoly with spillovers: Erratum," CORE Discussion Papers RP 892, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- d'Aspremont, Claude & Jacquemin, Alexis, 1988.
"Cooperative and Noncooperative R&D in Duopoly with Spillovers,"
American Economic Review,
American Economic Association, vol. 78(5), pages 1133-37, December.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis, . "Cooperative and noncooperative R&D in duopoly with spillovers," CORE Discussion Papers RP 823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
- Geroski, P A, 1993. "Antitrust Policy towards Co-operative R&D Ventures," Oxford Review of Economic Policy, Oxford University Press, vol. 9(2), pages 58-71, Summer.
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