Size of RJVs and Degree of Cooperation in Product Development

29 Pages Posted: 7 Dec 2010

See all articles by Marc Bourreau

Marc Bourreau

Telecom ParisTech

Pinar Dogan

Harvard University - Harvard Kennedy School (HKS)

Matthieu Manant

Université Paris XI Sud

Date Written: December 6, 2010

Abstract

In this paper we provide a model of Research Joint Venture (RJV), and study the incentives of competing firms to cooperate in product development. Firms that participate in the RJV decide on the product components for joint development, i.e., they decide on how much to cooperate. We consider three cases: (i) an RJV with an exogenous size and an endogenous scope, (ii) an RJV with an endogenous size and an exogenous scope, and (iii) an RJV with an endogenous size and scope. Using numerical simulations we show that, on average, there is a negative relationship between the size and the scope of the RJV in both cases (i) and (ii). In case (iii), we find a positive relationship between the equilibrium size and the equilibrium scope of the RJV. Furthermore, both the equilibrium size and scope of the RJV are increasing with the industry size.

Keywords: R&D Cooperation, RJV, Product Development

JEL Classification: L10

Suggested Citation

Bourreau, Marc and Dogan, Pinar and Manant, Matthieu, Size of RJVs and Degree of Cooperation in Product Development (December 6, 2010). HKS Working Paper No. 10-047, Available at SSRN: https://ssrn.com/abstract=1720918 or http://dx.doi.org/10.2139/ssrn.1720918

Marc Bourreau

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634
France

Pinar Dogan (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-6757 (Phone)
617-496-5747 (Fax)

HOME PAGE: http://scholar.harvard.edu/pdogan/home

Matthieu Manant

Université Paris XI Sud ( email )

15, rue Georges Clemenceau
Orsay cedex, 91405
France

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