Effects of one-way spillovers on market shares, industry price, welfare, and R & D cooperation

Publication Type:
Journal Article
Journal of Economics and Management Strategy, 1999, 8 (2), pp. 223 - 249
Issue Date:
Filename Description Size
Thumbnail2010005901OK.pdf323.26 kB
Adobe PDF
Full metadata record
With one-way spillovers, the standard symmetric two-period R & D model leads to an asymmetric equilibrium only, with endogeneous innovator and imitator roles. We show how R & D decisions and measures affirm heterogeneity - market shares, R & D shares, and profits - depend on spillovers and on R & D costs. While a joint lab always improves on consumer welfare, it yields higher profits, cost reductions, and social welfare only under extra assumptions, beyond those required with multidirectional spillovers. Finally, the novel issue of optimal R & D cartels is addressed. We show an optimal R & D cartel may seek to minimize R & D spillovers between its members.
Please use this identifier to cite or link to this item: