Endogenous Formation of Competitive Research Sharing Joint Ventures

Economic Analysis Group Working Paper No. 99-2

45 Pages Posted: 14 Aug 2000

See all articles by Patrick Greenlee

Patrick Greenlee

U.S. Department of Justice - Antitrust Division

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 1999

Abstract

Research joint ventures may coordinate research investments or improve research sharing. When research joint venture partners only share R&D results, large consortia are more profitable than small ones, and joint ventures prefer their rivals dispersed. According to a coalition formation game, an oligopoly partitions itself asymmetrically into two or three coalitions for a wide range of parameter values. In contrast to the case where joint ventures motivate joint profit maximizing research investments, an industry-wide joint venture maximizes welfare when spillovers are low, and a ban is preferred only for high spillovers. For intermediate values, two or more competing research sharing consortia are optimal.

JEL Classification: O31

Suggested Citation

Greenlee, Patrick, Endogenous Formation of Competitive Research Sharing Joint Ventures (December 1, 1999). Economic Analysis Group Working Paper No. 99-2, Available at SSRN: https://ssrn.com/abstract=204549 or http://dx.doi.org/10.2139/ssrn.204549

Patrick Greenlee (Contact Author)

U.S. Department of Justice - Antitrust Division ( email )

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