Competition, Mergers, and R&D Diversity
Richard J. Gilbert ()
Additional contact information
Richard J. Gilbert: University of California, Berkeley
Review of Industrial Organization, 2019, vol. 54, issue 3, 465-484
Abstract This paper describes a model of research and development (R&D) investment in which firms can choose any number of R&D projects that have independent and identical probabilities of success. The measure of R&D diversity is the number of projects that are undertaken by the industry. Absent spillovers or profits at risk from innovation, mergers often—but not always—decrease R&D diversity; however, the incremental effects decline rapidly with the number of industry rivals. Mergers can have significant adverse effects if the merging firms have large profits that are at risk from an innovation. A merger can promote investment in R&D and increase expected consumer surplus if discoveries have sufficiently large information spillovers.
Keywords: Competition; Innovation; Oligopoly; Mergers; Research and development (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s11151-019-09679-5 Abstract (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:revind:v:54:y:2019:i:3:d:10.1007_s11151-019-09679-5
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2
Access Statistics for this article
Review of Industrial Organization is currently edited by L.J. White
More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().