R&D cooperation in a three-firm Cournot industry

Abhishek Kabiraj ()
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Abhishek Kabiraj: Narayana Hrudayalaya Ltd., India

Economics Bulletin, 2018, vol. 38, issue 3, 1541-1546

Abstract: In a three firm structure, given that research outcome is uncertain, we discuss the choice of R&D organization. Cooperative research takes the form of RJV or knowledge sharing (KS) only, and this is optimally chosen at the research stage. Then the successful firms play Cournot at the production stage. We characterize subgame perfect equilibria for all possible values of the probability of success. We show that KS alone can never be a part of subgame perfect equilibrium. In equilibrium, RJV strictly dominates non-cooperative research for all low and high probabilities of success, and for intermediate values non-cooperative R&D occurs.

Keywords: R&D organization; Cooperative and non-cooperative research; Research joint venture; knowledge sharing. (search for similar items in EconPapers)
JEL-codes: L1 O3 (search for similar items in EconPapers)
Date: 2018-09-07
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Citations: View citations in EconPapers (2)

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