Dynamics in Research Joint Ventures and R&D Collaborations

44 Pages Posted: 17 Nov 2016

See all articles by Mario Samano

Mario Samano

HEC Montreal

Marc Santugini

University of Virginia - Department of Economics

Georges Zaccour

HEC Montreal - Department of Decision Sciences

Date Written: November 16, 2016

Abstract

We investigate the short- and long-term effects of different types of R&D collaborations on firms, consumers, and the industry. To that end, we consider a differentiated-product market in which firms compete a la Bertrand and invest in process innovation in order to lower the production cost over time. Investments are stochastic and there can be cartelization or competition strategies among firms at the moment of making the decision on the amount to invest in R&D. Our results show that in equilibrium, the long-run welfare is larger under a research joint venture than under other environments. Discounted present value profits increase with the level of the spillover but there are asymmetries that depend on the firms’ asymmetry on marginal costs.

Keywords: Industry Dynamics, Process Innovation, R&D, Research Joint Ventures

JEL Classification: L11, L24

Suggested Citation

Samano, Mario and Santugini, Marc and Zaccour, Georges, Dynamics in Research Joint Ventures and R&D Collaborations (November 16, 2016). Available at SSRN: https://ssrn.com/abstract=2870918 or http://dx.doi.org/10.2139/ssrn.2870918

Mario Samano (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Marc Santugini

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

Georges Zaccour

HEC Montreal - Department of Decision Sciences ( email )

HEC Montreal
3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3 H3T 2A7
Canada

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