Journal of Economics

, Volume 67, Issue 1, pp 63–73

Cooperation vs. competition in R&D: The role of stability of equilibrium

  • Rabah Amir
  • John Wooders
Articles

DOI: 10.1007/BF01227763

Cite this article as:
Amir, R. & Wooders, J. Zeitschr. f. Nationalökonomie (1998) 67: 63. doi:10.1007/BF01227763

Abstract

We consider a model in which firms first choose process R&D expenditures and then compete in an output market. We show the symmetric equilibrium under R&D competition is sometimes unstable, in which case two asymmetric equilibria must also exist. For the latter, we find, in contrast to the literature that total profits are sometimes higher with R&D competition than with research joint venture cartelization (due to the cost asymmetry of the resulting duopoly in the noncooperative case). Furthermore, these equilibria provide another instance of R&D-induced firm heterogeneity.

Keywords

strategic R&D research joint venture unstable equilibrium 

JEL classification

C72 L13 O31 

Copyright information

© Springer-Verlag 1998

Authors and Affiliations

  • Rabah Amir
    • 1
  • John Wooders
    • 1
  1. 1.Department of EconomicsOdense UniversityOdense MDenmark
  2. 2.Department of EconomicsUniversity of ArizonaTucsonUSA

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