On the Choice of R&D Organization

Kabiraj, Abhishek and Kabiraj, Tarun (2018): On the Choice of R&D Organization.

Abstract

This paper seeks to examine, in the context of Marjit (1991, Eco. Lett.) and Mukherjee and Marjit (2004, Gr. Dec. Nego.) models, the effect on the choice of R&D organization if the number of research lab is chosen by the firms optimally under R&D cooperation. Given the optimal form of R&D cooperation, the paper further studies the effect of introducing fee licensing under non-cooperative R&D. We show that our results substantially differ from those in the existing literature. The R&D cost, the success probability, and the size of innovation, all these play a crucial role.

• Item Type: MPRA Paper
• Language: English
• Keywords: R&D organization; Cooperative and non-cooperative research; Technology licensing; Cournot competition
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D

References

Amir, R, Evstigneev, I. and Wooders, J. (2003), “Non-cooperative versus cooperative R&D with endogenous spillover rates”, Games and Economic Behavior 42, 183- 207.

Arrow, K. (1962), Economic Welfare and the Allocation of Resources for Invention, in R. R. Nelson (ed.), The Rate and Direction of Inventive Activity, NJ: Princeton University Press, 609-625.

Belleflamme, P. and Vergari, C. (2011), “Incentives to innovate in oligopolies”, The Manchester School 79, 6-28.

Chattopadhyay, S. and Kabiraj, T. (2015), “Incomplete information and R&D organization”, Economics Bulletin 35, p. A3

Combs, K.L. (1992), “Cost sharing vs. multiple research project in cooperative R&D”, Economics Letters 39, 353-357. d’Aspremont, C. and A. Jacquemin (1988) “Cooperative and non-cooperative R&D in duopoly with spillovers”, American Economic Review 5, 1133-37.

Gilbert, R. J. and Newbery, D. M. G. (1982), “Preemptive Patenting and the Persistence of Monopoly”, American Economic Review, 72, 514–526.

Kabiraj, T. (2007) “On the incentives for cooperative research”, Research in Economics 61, 17-23.

Kabiraj, T. and S. Chattopadhyay (2015) “Cooperative vs. non-cooperative R&D incentives under incomplete information”, Economics of Innovation and New Technology 24, 624-632

Katz, M. (1986), “An analysis of cooperative research and development”, RAND Journal of Economics 17, 527-543.

Katz, M. and Shapiro, C. (1985), “On the licensing of innovations”, Rand Journal of Economics 16, 504-520.

Marjit, S. (1990), “On a non-cooperative theory of technology transfer”, Economics Letters 33, 293-298.

Marjit, S. (1991), “Incentives for cooperative and non-cooperative R and D in duopoly” Economics Letters 37, 187-191.

Mukherjee, A. (2001), “Technology transfer with commitment”, Economic Theory 17, 345-369.

Mukherjee, A. and S. Marjit (2004) “R&D organization and technology transfer”, Group Decision and Negotiation 13, 243-258. Kamien, M, Muller, E. and Zang, I. (1992), “Research joint ventures and R&D cartels”, American Economic Review 82, 1293-1306. Shibata, T. (2014), “Market Structure and R&D Investment Spillovers”, Economic Modelling 43, 321-329.

Suzumura, K. (1992) “Cooperative and non-cooperative R&D in an oligopoly with spillovers” American Economic Review 82, 1307-20.

Wang, X. H. (1998), “Fee versus royalty licensing in a Cournot duopoly model”, Economics Letters 60, 55-62.

Yi, S-S, (1999), “Market structure and incentives to innovate: the case of Cournot oligopoly”, Economics Letters 65, 379-388.