R&D Returns, Market Structure, and Research Joint Ventures

Rabah Amir (rabah-amir@uiowa.edu)

Journal of Institutional and Theoretical Economics (JITE), 2000, vol. 156, issue 4, 583-

Abstract: A two-period symmetric Cournot duopoly with linear demand and costs is analyzed under linear (or more general) returns to scale in process R&D. Subgame-perfect equilibrium may call for one firm to fully innovate while the other firm remains just as before. The outcome is a polar duopoly or monopoly (one firm endogenously exiting). Two research joint venture schemes and the noncooperative solution are compared. Due to built-in symmetry, a joint lab does not always lead to the best performance. Overall, our findings differ quite substantially from those based on strongly decreasing R&D returns and symmetric outcomes.

JEL-codes: D43 L13 O30 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (14)

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