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Monopoly versus R&D-integrated duopoly

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  • AMIR, Rabah
  • NANNERUP, Niels
  • STEPANOVA, Anna
  • EGUIAZAROVA, Elina

Abstract

In the standard two-stage framework of R&D/product market competition, this paper provides a performance comparison between monopoly and the cartelized research joint venture, using two well-known models based on different versions of the R&D spillover process. According to the model with a wider scope of application, monopoly always leads to a higher propensity for R&D and, when R&D costs are low, to the best overall market performance. The results also allow for a comparison between the two underlying models of strategic R&D.

Suggested Citation

  • AMIR, Rabah & NANNERUP, Niels & STEPANOVA, Anna & EGUIAZAROVA, Elina, 2001. "Monopoly versus R&D-integrated duopoly," LIDAM Discussion Papers CORE 2001051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2001051
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    References listed on IDEAS

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    1. 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 1133-1137, December.
    2. Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
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    4. Amir, Rabah & Wooders, John, 2000. "One-Way Spillovers, Endogenous Innovator/Imitator Roles, and Research Joint Ventures," Games and Economic Behavior, Elsevier, vol. 31(1), pages 1-25, April.
    5. Martin, Stephen, 1996. "R & D joint ventures and tacit product market collusion," European Journal of Political Economy, Elsevier, vol. 11(4), pages 733-741, April.
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    7. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    8. Rabah Amir & John Wooders, 1999. "Effects of One‐Way Spillovers on Market Shares, Industry Price, Welfare, and R & D Cooperation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(2), pages 223-249, June.
    9. Fershtman, Chaim & Gandal, Neil, 1994. "Disadvantageous semicollusion," International Journal of Industrial Organization, Elsevier, vol. 12(2), pages 141-154, June.
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    11. Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 995-1012, October.
    12. Francis Bloch, 2002. "Coalitions and Networks in Industrial Organization," Manchester School, University of Manchester, vol. 70(1), pages 36-55, January.
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    Cited by:

    1. Georg Götz & Anna Hammerschmidt, 2009. "R&D Cooperation With Unit‐Elastic Demand," Bulletin of Economic Research, Wiley Blackwell, vol. 61(2), pages 179-188, April.
    2. Marie‐Laure Cabon‐Dhersin & Romain Gibert, 2020. "R&D cooperation, proximity and distribution of public funding between public and private research sectors," Manchester School, University of Manchester, vol. 88(6), pages 773-800, December.
    3. Marie-Laure Cabon-Dhersin & Rim Lahmandi-Ayed, 2011. "R&D Organization: Cooperation or Cross-Licensing?," Recherches économiques de Louvain, De Boeck Université, vol. 77(1), pages 31-52.
    4. Adam Karbowski & Jacek Prokop, 2018. "R&D activities of enterprises, product market leadership, and collusion," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 735-753.
    5. Marie-Laure Cabon-Dhersin & Romain Gibert, 2017. "Cooperation or non-cooperation in R&D: how should research be funded? ," Working Papers hal-01587014, HAL.
    6. Marie-Laure Cabon-Dhersin & Romain Gibert, 2018. "Cooperation or non-cooperation in R&D: how should research be funded?," Post-Print hal-02006515, HAL.
    7. Alain-Désiré Nimubona & Hassan Benchekroun, 2014. "Environmental R&D in the Presence of an Eco-Industry," Working Papers 1406, University of Waterloo, Department of Economics, revised Sep 2014.

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    More about this item

    Keywords

    oligopolistic R&D; spillover process; research joint ventures; R&D cartel.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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