Industrial Dynamics

Volume 10 of the series Studies in Industrial Organization pp 157-175

Cooperation between Rivals: Informal Know-How Trading

  • Eric von HippelAffiliated withMassachusetts Institute of Technology

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It has long been recognized that it is difficult for an innovating firm to fully appropriate the benefits arising from its innovations, and that desired research might therefore not be performed (Nelson 1959, pp. 297–306). One sometimes possible solution to this dilemma is cooperative R&D conducted by firms who share the costs and benefits of particular R&D projects (Johnson 1973).