Process R&D investment and social dilemmas

Michal Ramsza (), Adam Karbowski () and Tadeusz Platkowski ()
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Michal Ramsza: SGH Warsaw School of Economics
Adam Karbowski: SGH Warsaw School of Economics
Tadeusz Platkowski: University of Warsaw

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2021, vol. 48, issue 3, No 1, 315-336

Abstract: Abstract We consider a coopetitive game model of firms’ behavior in process R&D with entry cost. We compare the competitive behavior of firms in R&D with the R&D coopetition scenario. In R&D coopetition, firms engage in a bargaining process to reach a binding R&D agreement. We find that R&D competition can lead to a prisoner’s dilemma or a chicken game between market rivals. The possibility of entering a binding R&D agreement resolves the above social dilemmas associated with the firms’ competitive behavior. In turn, under R&D coopetition, for a medium level of R&D entry cost, firms may enter a trust dilemma, but it is a beneficial scenario in comparison with the corresponding R&D competition outcome.

Keywords: R&D investment; Bargaining; Competition; Coopetition; Social dilemmas (search for similar items in EconPapers)
JEL-codes: D02 D21 O3 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40812-021-00186-x

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