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Noncooperative versus cooperative R&D with endogenous spillover rates

Author

Listed:
  • AMIR, Rabah
  • EVSTIGNEEV, Igor
  • WOODERS, John

Abstract

This paper deals with a general version of a two-stage model of R&D and product market competition. We provide a thorough generalization of previous results on the comparative performance of noncooperative and cooperative R&D, dispensing in particular with ex-post firm symmetry and linear demand assumptions. We also characterize the structure of profit-maximizing R&D cartels where firms competing in a product market jointly decide R&D expenditure, as well as internal spillover, levels. We establish the firms would essentially always prefer extremal spillovers, and within the context of a standard specification, derive conditions for the optimality of minimal spillover.
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Suggested Citation

  • AMIR, Rabah & EVSTIGNEEV, Igor & WOODERS, John, 2003. "Noncooperative versus cooperative R&D with endogenous spillover rates," LIDAM Reprints CORE 1650, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1650
    DOI: 10.1016/S0899-8256(02)00541-9
    Note: In : Games and Economic Behavior, 42, 183-207, 2003
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    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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