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Innovation and cooperation with horizontal spillovers

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  • Khazabi, Massoud

Abstract

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.

Suggested Citation

  • Khazabi, Massoud, 2004. "Innovation and cooperation with horizontal spillovers," MPRA Paper 39497, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39497
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    References listed on IDEAS

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    More about this item

    Keywords

    R&D; Spillovers; Cooperation;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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