The Impact of Market Structure and Learning on the Tradeoff between R&D Competition and Cooperation

David Besanko*, Jianjun Wu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

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 languageEnglish (US)
Pages (from-to)166-201
Number of pages36
JournalJournal of Industrial Economics
Volume61
Issue number1
DOIs
StatePublished - Mar 1 2013

ASJC Scopus subject areas

  • Economics and Econometrics
  • Accounting
  • Business, Management and Accounting(all)

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