Abstract

http://ssrn.com/abstract=1349963
 
 

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A Dynamic Analysis of Cooperative Research in the Semiconductor Industry


Minjae Song


Simon Graduate School of Business, University of Rochester

July 7, 2010

International Economic Review, Forthcoming.
Simon School Working Paper No. FR 08-18

Abstract:     
In this paper I construct a dynamic oligopolistic model of research joint ventures (RJVs). In my model, when firms form an RJV, they invest to improve product quality, and fully share the rewards of research success. RJVs benefit firms by eliminating duplicative research efforts, but firms also give up the possibility of becoming a solo innovator. Consumers benefit from lower prices, but may have to wait longer for new products to arrive. I show that RJVs are welfare enhancing by quantitatively evaluating these trade-offs with data from the semiconductor industry. I also analyze how changes in product market competition affect research cooperation.

Number of Pages in PDF File: 39

Keywords: Research Joint Venture, Dynamic Model of Oligopoly, Product Innovation, Firm Heterogeneity

JEL Classification: C73, D92, L63, O31

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Date posted: February 26, 2009 ; Last revised: August 26, 2010

Suggested Citation

Song, Minjae, A Dynamic Analysis of Cooperative Research in the Semiconductor Industry (July 7, 2010). International Economic Review, Forthcoming.; Simon School Working Paper No. FR 08-18 . Available at SSRN: http://ssrn.com/abstract=1349963 or http://dx.doi.org/10.2139/ssrn.1349963

Contact Information

Minjae Song (Contact Author)
Simon Graduate School of Business, University of Rochester ( email )
Rochester, NY 14627
United States
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