Title: Stable R&D Cooperation with Spillovers
Authors: Kesteloot, Katrien ×
Veugelers, Reinhilde #
Issue Date: 1995
Publisher: Mit press
Series Title: Journal of economics & management strategy vol:4 issue:4 pages:651-672
Abstract: The literature on the incentives for R&D cooperation with spillovers typically deals only with the factors affecting cooperative profits. This paper focuses on the incentives to cheat and the stability of such cooperative agreements in a repeated game framework. It is shown that the stability of cooperation is influenced by the nature and magnitude of spillovers, relative to the nature and degree of product market competition. While cooperative profits are higher with large positive (exogenous, unintended) know-how spillovers, such as in fundamental research, our analysis shows that it may be easier to sustain cooperation in areas with lower spillovers, such as applied research, because of the smaller incentives to cheat on the initial agreement, at feast when firms produce substitutes. Alternatively, the possibility of technology sharing (i.e., intended or endogenous spillovers), besides R&D coordination, not only increases cooperative profits but also reduces the incentives to defect from a cooperative equilibrium.
ISSN: 1058-6407
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Academic Centre for Nursing and Midwifery
Department of Managerial Economics, Strategy and Innovation (MSI), Leuven
Department of Public Health miscellaneous
× corresponding author
# (joint) last author

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