R&D-hindering collusion

Emanuele Bacchiega, Luca Lambertini () and Andrea Mantovani

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In an extended version of d'Aspremont and Jacquemin's (1988) R&D competition model we find a region where the game is a prisoner's dilemma: firms still invest in R&D but they would obtain a higher profit by not investing at all. In a repeated version of the game, we prove that firms implicitly tend to collude and refrain from investing in R&D, thus decreasing social welfare. When this happens, inviting firms to form a joint venture appears as a remedy to the lack of innovation efforts rather than the excess thereof.

Date: 2008-11
New Economics Papers: this item is included in nep-com, nep-ind, nep-ino and nep-mic
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: R&D-Hindering Collusion (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:651

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