We would like to thank the Editor and two anonymous referees for their extensive and valuable comments on an earlier version of this paper.
The Impact of Market Structure and Learning on the Tradeoff between R&D Competition and Cooperation†
Article first published online: 24 MAR 2013
© 2013 Blackwell Publishing Ltd and the Editorial Board of The Journal of Industrial Economics
The Journal of Industrial Economics
Volume 61, Issue 1, pages 166–201, March 2013
How to Cite
Besanko, D. and Wu, J. (2013), The Impact of Market Structure and Learning on the Tradeoff between R&D Competition and Cooperation. The Journal of Industrial Economics, 61: 166–201. doi: 10.1111/joie.12010
- Issue published online: 24 MAR 2013
- Article first published online: 24 MAR 2013
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.