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

Rabah Amir, John Wooders

    Research output: Contribution to journalArticle

    Abstract

    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.

    Original languageEnglish (US)
    Pages (from-to)223-249
    Number of pages27
    JournalJournal of Economics and Management Strategy
    Volume8
    Issue number2
    StatePublished - Jun 1 1999

    Fingerprint

    Profitability
    Cost reduction
    Industry
    Costs
    Market share
    Spillover
    Profit

    ASJC Scopus subject areas

    • Business, Management and Accounting(all)
    • Economics and Econometrics
    • Strategy and Management
    • Management of Technology and Innovation

    Cite this

    Effects of one-way spillovers on market shares, industry price, welfare, and R & D cooperation. / Amir, Rabah; Wooders, John.

    In: Journal of Economics and Management Strategy, Vol. 8, No. 2, 01.06.1999, p. 223-249.

    Research output: Contribution to journalArticle

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