IDEAS home Printed from https://ideas.repec.org/p/ott/wpaper/1902e.html
   My bibliography  Save this paper

Cooperating in R&D and Advertising

Author

Listed:
  • Parisa Pourkarmi

    (Department of Economics, Carleton University, Ottawa, ON)

  • Gamal Atallah

    (Department of Economics, University of Ottawa, Ottawa, ON)

Abstract

This paper studies the impact of cooperative R&D and advertising on innovation and welfare in a duopolistic industry. The model incorporates two symmetric firms producing differentiated products. Firms invest in R&D and advertising in the presence of R&D spillovers and advertising spillovers. Advertising spillovers may be positive or negative. Four cooperative structures are studied: no cooperation, R&D cooperation, advertising cooperation, R&D and advertising cooperation. R&D spillovers and advertising spillovers always increase innovation and welfare if products are highly differentiated and/or spillovers are sufficiently high. The ranking of cooperation settings in terms of R&D, profits and welfare depends on product differentiation, R&D spillovers and advertising externalities. Firms always prefer cooperation on both dimensions, which is socially beneficial only when advertising and R&D spillovers are sufficiently high.

Suggested Citation

  • Parisa Pourkarmi & Gamal Atallah, 2019. "Cooperating in R&D and Advertising," Working Papers 1902E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:1902e
    as

    Download full text from publisher

    File URL: https://socialsciences.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/1902e.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    R&D; Advertising; Cooperation; Spillovers; Product differentiation; Innovation; Marketing.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ott:wpaper:1902e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aggey Semenov (email available below). General contact details of provider: https://edirc.repec.org/data/deottca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.