Endogenous Technology Sharing in R&D Intensive Industries
49 Pages Posted: 18 Dec 2010
There are 2 versions of this paper
Endogenous Technology Sharing in R&D Intensive Industries
Endogenous Technology Sharing in R&D Intensive Industries
Date Written: 2010
Abstract
This paper analyses endogenous formation of technology sharing coalitions with asymmetric firms. Coalition partners produce complementary technology advancements, although firms do not co-operate on R&D investment level or in the product market. The equilibrium coalition outcome is either between the two most efficient firms, or a coalition with all three firms. The two-firm coalition is the preferred outcome of a welfare maximising authority if ex ante marginal cost is sufficiently high, and the threefirm coalition is preferred otherwise. Furthermore, we show that the equilibrium outcomes result in the lowest total R&D investment of all possible outcomes. Aircraft engine manufacturing provides a case study, and indicates the importance of antitrust issues as an addition to the theory. --
Keywords: R&D, endogenous coalitions, asymmetric firms
JEL Classification: L11, L13
Suggested Citation: Suggested Citation
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