Innovation and cooperation with horizontal spillovers
The paper proposes a theory of innovation and market structure. The model incorporates n firms with horizontal spillovers all interacting within a hypothetical industry. In a two-stage sequential game framework, four types of cooperation are studied: full non-cooperation; cooperation in both stages; cooperation only in the R&D stage; and simultaneous cooperation and non-cooperation in the R&D stage. It is shown that the effect of competition on total innovation investment varies among all four cases and mostly depends on the level of spillover effects as well as the level of coordination among competing firms.
|Date of creation:||01 Dec 2004|
|Date of revision:|
|Publication status:||Published in The IUP Journal of Industrial Economics No. 4.Vol. 4(2007): pp. 33-46|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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4481507, Harvard University Department of Economics.
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RAND Journal of Economics,
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