Competing Research Joint Ventures

Morton I. Kamien, Israel Zang

Research output: Contribution to journalLetterpeer-review

Abstract

Research and development (R&D) competition among firms has recently been extended to R&D competition involving research joint ventures. It was previously shown that in an industry conducting cost‐reducing R&D followed by competition in the product market, if all firms both fully share R&D information and coordinate investments to maximize pint profits, final products prices are lower, and firms' profits are higher than with information shriving alone, joint profit maximization alone, or no cooperation. In this paper we question whether a single research joint venture (RJV) cartel is the best form of industry R&D coordination. We show that there are circumstances in which splitting a single RJV cartel into several competing ones yields lower product prices. Moreover, we show that in these circumstances, splitting the industry into exactly two competing RJV cartels would be best.

Original languageEnglish
Pages (from-to)23-40
Number of pages18
JournalJournal of Economics and Management Strategy
Volume2
Issue number1
DOIs
StatePublished - Mar 1993

Fingerprint

Dive into the research topics of 'Competing Research Joint Ventures'. Together they form a unique fingerprint.

Cite this