INCENTIVE ISSUES IN R&D CONSORTIA: INSIGHTS FROM APPLIED GAME THEORY

"This article sketches how insights from applied game theory can be applied to Research and Development (R&D) consortia using a case study on an international plant breeding consortium. The insights jointly comprise a new "logic of collective action in R&D," which is inspired by Olson's Logic of Collective Action but goes beyond it. We analyze R&D consortia as institutions that respond to a variety of incentive problems which are obstacles to realizing the benefits of cooperation that arise due to the public goods nature of outputs, complementarities of inputs, and economies of scale and scope. Additionally, we sketch a "big-picture" consortium game, which abstracts from specific incentive issues. "("JEL "B41, D02, H41, O31, O32) Copyright (c) 2008 Western Economic Association International.