Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Monday, May 13, 2013

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

Posted by D. Daniel Sokol

David Besanko, Northwestern University - Kellogg School of Management and Jianjun Wu, Princeton Economics Group, Inc. discuss The Impact of Market Structure and Learning on the Tradeoff between R&D Competition and Cooperation.

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.

http://lawprofessors.typepad.com/antitrustprof_blog/2013/05/the-impact-of-market-structure-and-learning-on-the-tradeoff-between-rd-competition-and-cooperation.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef017eea31bb8b970d

Listed below are links to weblogs that reference The Impact of Market Structure and Learning on the Tradeoff between R&D Competition and Cooperation:

Comments

Post a comment