On R&D information sharing and merger

Uday Sinha

Economic Modelling, 2013, vol. 32, issue C, 369-376

Abstract: The paper deals with the interaction of sharing cost information and merger in a Cournot duopoly. We show that an innovating firm would share information about the cost realization with its rival provided the market size is relatively small or, the R&D technology is relatively more efficient in a medium market size. However, in a large market, or in a medium market size with less efficient R&D technology, the innovating firm does not share information with its rival. In equilibrium whether information sharing occurs or not, merger is always formed. We find that the social welfare may be higher under incomplete information regime. We also establish the role of trade association in facilitating merger through information exchange.

Keywords: Information sharing; Trade association; Market size; R&D; Merger; Welfare (search for similar items in EconPapers)
JEL-codes: L12 L13 L41 O32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: On R&D Information Sharing and Merger (2010)
Working Paper: On R&D Information Sharing and Merger (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:32:y:2013:i:c:p:369-376

DOI: 10.1016/j.econmod.2013.02.029

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