Incomplete information and R&D organization

This paper studies the choice of cooperative versus non-cooperative R&D under incomplete information about the innovation size of the rival. It is assumed that the R&D outcome is stochastic and continuously distributed with a given mean and a constant variance. We show that the incentive for cooperative research is smaller the larger is the variance of the R&D outcome, irrespective of the nature of the product market competition (Cournot versus Bertrand).

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Year of publication:	2015-03-11
Authors:	Chattopadhyay, Srobonti ; Kabiraj, Tarun
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 35.2015, 1, p. 14-20
Publisher:	AccessEcon
Subject:	Cooperative R&D \| non-cooperative R&D \| incomplete information \| variance of the research outcome

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Extent:	application/pdf
Type of publication:	Article
Classification:	Q3 - Nonrenewable Resources and Conservation ; D4 - Market Structure and Pricing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011199655