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Research Joint Ventures: A Barrier To Entry?

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  • Paul O'Sullivan

    () (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)

Abstract

This paper examines a one-shot game where two symmetric incumbents are faced with possible entry into an industry, where firms may differ in the efficiency of R&D in reducing marginal production costs. The decision facing the incumbents is whether to compete at the R&D stage or to form a RJV. R&D competition may imply that remaining in the market is not viable for the incumbents and the entrant is a monopolist. Conversely, RJV formation may make entry unprofitable and, possibly, increase welfare. The effect on welfare will depend on whether output is exported in its entirety or consumed domestically.

Suggested Citation

  • Paul O'Sullivan, 2013. "Research Joint Ventures: A Barrier To Entry?," Economics, Finance and Accounting Department Working Paper Series n246-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n246-13.pdf
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    References listed on IDEAS

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    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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