R&D and Market Sharing Agreements

Jérôme Dollinger, Ana Mauleon and Vincent Vannetelbosch
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Jérôme Dollinger: Université catholique de Louvain, LIDAM/CORE, Belgium
Vincent Vannetelbosch: Université catholique de Louvain, LIDAM/CORE, Belgium

No 2023004, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We analyze the formation of R&D alliances and market sharing (MS) agreements by which firms commit not to enter in each other’s territory in oligopolistic markets. We show that R&D alliance structures are stable only in the presence of MS agreements. Thus, long lasting R&D alliances could signal the existence of some MS agreement in the industry. We characterize the set of stable symmetric pairs of coalition structures with identical R&D and MS structure. In addition, we show the stability of a class of asymmetric pairs of coalition structures where the most efficient firms form both an R&D and a MS agreement while the other firms do not form any MS agreement but form two smaller R&D alliances. Even though MS agreements are detrimental for consumers, we show that stable cooperation in terms of R&D is yet a better outcome for consumers than no cooperation at all.

Keywords: R&D alliances; Market sharing agreements; Oligopoly; Cournot competition; Stability (search for similar items in EconPapers)
JEL-codes: C70 L13 L40 (search for similar items in EconPapers)
Pages: 39
Date: 2023-01-20
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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Related works:
Journal Article: R &d and market sharing agreements (2024)
Working Paper: R&D and market sharing agreements (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2023004

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