A simple model RJV is presented to examine the private and social incentives for cooperative R&D in the presence of product market competition. The key assumption to our analysis was that the spillover rate increases with cooperation in R&D and total industry profit decreases as the spillover rate increases due to intensified post-innovation competition. This leads to a negative impact of cooperative R&D, introducing a trade-off in the model. It is shown that private firms prefer a cooperative R&D to non-cooperative R&D competition when spillover rates are high and that the private incentive for cooperative R&D is less than the social incentive.
All Science Journal Classification (ASJC) codes
- Industrial relations
- Aerospace Engineering
- Economics and Econometrics
- Economics, Econometrics and Finance (miscellaneous)
- Strategy and Management
- Industrial and Manufacturing Engineering