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Article
Research Joint Ventures and Product Innovation: Some Welfare Aspects
Economics of Innovation and New Technology (1997)
  • Joanna Poyago-Theotoky, Loughborough University
Abstract

This paper considers a model of horizontal and vertical product differentiation. Firms spending on R&D may improve the quality of their product. R&D cooperation in the form of a RJV among a subset of innovating firms introduces the possibility of a much better product being produced relative to the case of non-cooperation in R&D. Given Bertrand competition in the product market the RJV sets a common price for the improved good. It is shown that even under this extreme form of cooperation, there are clear instances where social welfare is enhanced relative to the non-cooperative outcome.

Publication Date
1997
Citation Information
Joanna Poyago-Theotoky. "Research Joint Ventures and Product Innovation: Some Welfare Aspects" Economics of Innovation and New Technology Vol. 5 (1997)
Available at: http://works.bepress.com/joanna_poyago_theotoky/22/