R&D Returns, Market Structure and Research Joint Ventures

Rabah Amir ()

No 1999-07, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: A two period R&D symmetric Cournot duopoly game with linear demand and costs is analysed 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 RJV schemes are compared to the noncooperative solution. Due to built-in symmetry, a joint lab RJV does not always lead to the best performance. Nonetheless, whenever a joint lab innovates, it yields the highest welfare. Overall, our findings differ substantially from those based on strongly decreasing R&D returns and symmetric outcomes.

Keywords: strategic R&D; dominated strategies; asymmetric equilibria; research joint venture (search for similar items in EconPapers)
JEL-codes: D43 L13 O30 (search for similar items in EconPapers)
Pages: 20 pages
Date: 1999-05
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Published in: Journal of Institutional and Theoretical Economics, 156(4), 583-598, 2000

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuieci:1999-07

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