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Computational Results on Membership in R&D Cooperation Networks: To Be or Not To Be in a Research Joint Venture

Author

Listed:
  • Duarte Leite

    () (LIAAD – INESC, LA, Faculdade de Economia do Porto, Universidade do Porto)

  • Pedro Campos

    () (LIAAD – INESC, LA, Faculdade de Economia do Porto, Universidade do Porto)

  • Isabel Mota

    () (CEF.UP, Faculdade de Economia do Porto, Universidade do Porto)

Abstract

In this study, we analyze firms’ membership in R&D (Research and Development) cooperation networks. Our main research hypothesis is that the membership in cooperation networks is related to the degree of the knowledge spillover. The approach focus on both cost symmetry and cost asymmetry. For that purpose, our work is developed in two tasks: we first develop an analytical model with three stages: in the first, firms decide whether to participate in a cooperative research network; in the second they simultaneously choose the level of R&D output, and finally firms choose the level of output through Cournot competition under both cost symmetry and cost asymmetry. Then we proceed with computational simulations in order to verify our hypothesis. From our results, we were able to conclude that cooperation leads to an improvement on RJV firms’ position in the market as it allows them to produce more than others with the same production conditions. Additionally, cooperating firms have to spend fewer resources on research, which turns the network a tremendous success on the productive efficiency level.

Suggested Citation

  • Duarte Leite & Pedro Campos & Isabel Mota, 2011. "Computational Results on Membership in R&D Cooperation Networks: To Be or Not To Be in a Research Joint Venture," FEP Working Papers 420, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:420
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    References listed on IDEAS

    as
    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. Birgit Aschhoff & Tobias Schmidt, 2008. "Empirical Evidence on the Success of R&D Cooperation—Happy Together?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(1), pages 41-62, August.
    3. Gamal Atallah, 2003. "Information sharing and the stability of cooperation in research joint ventures," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(6), pages 531-554.
    4. Poyago-Theotoky, Joanna, 1995. "Equilibrium and Optimal Size of a Research Joint Venture in an Oligopoly with Spillovers," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 209-226, June.
    5. Gamal Atallah, 2007. "Research Joint Ventures with Asymmetric Spillovers and Symmetric Contributions," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(7), pages 559-586.
    6. repec:ebl:ecbull:v:12:y:2005:i:18:p:1-11 is not listed on IDEAS
    7. Cellini, Roberto & Lambertini, Luca, 2009. "Dynamic R&D with spillovers: Competition vs cooperation," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 568-582, March.
    8. Suzumura, Kotaro, 1992. "Cooperative and Noncooperative R&D in an Oligopoly with Spillovers," American Economic Review, American Economic Association, vol. 82(5), pages 1307-1320, December.
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    10. Carayol, Nicolas & Roux, Pascale, 2005. "Self-organizing Innovation Networks: When do Small Worlds Emerge?," European Journal of Economic and Social Systems, Lavoisier, pages 307-332.
    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. Amir, Rabah & Evstigneev, Igor & Wooders, John, 2003. "Noncooperative versus cooperative R&D with endogenous spillover rates," Games and Economic Behavior, Elsevier, vol. 42(2), pages 183-207, February.
    13. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
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    15. Carayol, Nicolas & Roux, Pascale, 2005. "Self-organizing Innovation Networks: When do Small Worlds Emerge?," European Journal of Economic and Social Systems, Lavoisier, pages 307-332.
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    More about this item

    Keywords

    R&D; networks; spillover; simulation; RJV;

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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