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Cooperation in Product Development and Process R&D Between Competitors

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  • M. Bourreau
  • P. Dogan

Abstract

In this paper, we first provide a simple framework for cooperation in product development between competitors. We put forward the trade-off between the benefits obtained through development cost-sharing and the cost of intensified competition due to reduced product differentiation, which implies that no-cooperation can be an equilibrium outcome. We allow for firms to cooperate partially, i.e., to develop some product components jointly, but not necessarily all components. This enables us to study the factors that may have an effect on the degree of cooperation in product development, both in the presence and in the absence of process R&D. We also analyze the interaction between cooperation decisions on product development and process R&D. By considering a direct link between the two, we show that the degree of cooperation in product development may adversely affect the intensity of cooperation in process R&D.
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  • M. Bourreau & P. Dogan, "undated". "Cooperation in Product Development and Process R&D Between Competitors," Working Paper 33645, Harvard University OpenScholar.
  • Handle: RePEc:qsh:wpaper:33645
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    File URL: http://scholar.harvard.edu/pdogan/node/33645
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dawid, H. & Kopel, M. & Kort, P.M., 2013. "R&D competition versus R&D cooperation in oligopolistic markets with evolving structure," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 527-537.
    2. Jeitschko Thomas D. & Zhang Nanyun, 2014. "Adverse Effects of Patent Pooling on Product Development and Commercialization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 14(1), pages 1-31, January.
    3. Bourreau, Marc & Dogan, Pinar & Manant, Matthieu, 2010. "Size of RJVs and Degree of Cooperation in Product Development," Working Paper Series rwp10-047, Harvard University, John F. Kennedy School of Government.
    4. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2013. "Cooperative Investment, Uncertainty and Access," CEPR Discussion Papers 9376, C.E.P.R. Discussion Papers.
    5. Chiara CONTI, 2013. "Asymmetric information in a duopoly with spillovers: new findings on the effects of RJVs," Departmental Working Papers 2013-04, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    6. Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
    7. Bourreau, Marc & Doğan, Pınar & Manant, Matthieu, 2016. "Size of RJVs with partial cooperation in product development," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 77-106.
    8. Thomas Jeitschko & Nanyun Zhang, 2011. "Patent Pools and Product Development," Working Papers 2011-02, Towson University, Department of Economics, revised Feb 2011.
    9. Pun, Hubert & Ghamat, Salar, 2016. "The value of partnership under competition: When competitors may be R&D joint-venture and supply-chain partners for a critical component," International Journal of Production Economics, Elsevier, vol. 177(C), pages 1-11.
    10. Petal Jean Hackett, 2012. "Cutting too Close? Design Protection and Innovation in Fashion Goods," CESifo Working Paper Series 3716, CESifo Group Munich.

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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