Abstract
This paper compares R&D competition and cooperation when firms can devote resources to a 'safe' investment or a risky R&D investment. When the discovery of a new product creates positive externalities on non-discovering firms, equilibrium investment flow, ex ante investment, and welfare under R&D competition are less than or equal to what they are under research cooperation. With negative externalities, R&D cooperation results in the same or lower ex ante investment than under R&D competition, and social welfare may also be less. Our results have relevance for empirical studies of the impact of R&D cooperation on R&D outcomes.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 166-201 |
| Number of pages | 36 |
| Journal | Journal of Industrial Economics |
| Volume | 61 |
| Issue number | 1 |
| DOIs | |
| State | Published - Mar 2013 |
ASJC Scopus subject areas
- Accounting
- General Business, Management and Accounting
- Economics and Econometrics
