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Quality-improving alliances in differentiated oligopoly

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  • Frédéric Deroian

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Frédéric Gannon

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

We study rival firms' incentives in quality-improving Research and Development (R&D) networks. The analysis stresses the role of free riding associated to collaboration and three major consequences emerge: R&D efforts decrease with the number of partners, networks of alliances are over-connected as compared to the social optimum and the profitmaximizing number of alliances is possibly non monotonic (decreasing then increasing) with respect to inverse measure of product differentiation.

Suggested Citation

  • Frédéric Deroian & Frédéric Gannon, 2006. "Quality-improving alliances in differentiated oligopoly," Post-Print halshs-00084891, HAL.
    • Handle: RePEc:hal:journl:halshs-00084891
    DOI: 10.1016/j.ijindorg.2005.09.006
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00084891
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    References listed on IDEAS

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    Keywords

    Vertically and horizontally Differentiated Oligopoly; Product Innovation; R&D Alliance;
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