A Dynamic Analysis of Cooperative Research in the Semiconductor Industry

21 Pages Posted: 25 Nov 2011

See all articles by Minjae Song

Minjae Song

Bates White Economic Consulting

Date Written: November 2011

Abstract

In this article I construct a dynamic oligopoly model of research joint ventures (RJVs) where firms, investing to improve product quality, 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‚Äźoffs with data from the semiconductor industry. I also analyze how changes in product market competition affect research cooperation.

Suggested Citation

Song, Minjae, A Dynamic Analysis of Cooperative Research in the Semiconductor Industry (November 2011). International Economic Review, Vol. 52, Issue 4, pp. 1157-1177, 2011, Available at SSRN: https://ssrn.com/abstract=1964489 or http://dx.doi.org/10.1111/j.1468-2354.2011.00663.x

Minjae Song (Contact Author)

Bates White Economic Consulting ( email )

1300 I Street NW
Washington, DC DC 20005
United States
2027471404 (Phone)

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