Uncertainty , Spillovers , and Cooperative R & D
نویسنده
چکیده
This paper extends the line of research on cooperation in R&D in an oligopoly with spillovers. Departing from the existing literature, we adopt an infinite-horizon dynamic framework, incorporate uncertainty, and define technology spillover as diffusion of a new technology from an innovator to non-innovators. We consider two cooperative regimes: the R&D cartel in which firms coordinates R&D efforts only, and the RJV (research joint venture) in which firms also share an innovation. Which regime is selected by an oligopoly hinges on the static effect of an innovation on the aggregate industry profit, but is independent of the speed of spillover or the degree of uncertainty. We also examine if the R&D regime chosen by an oligopoly is the best for society. JEL Classification: L1; O3
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