Cooperative and noncooperative R&D in duopoly with differentiated goods and endogenous spillovers

The paper analyzes a three stage game of R&D where duopoly are engaged in cost-reducing innovation. In the model, the spillovers of information are treated endogenous and the goods is differentiated at the same time. It is shown if the R&D stage is non-cooperative, the firms will never disclose their information when goods is substituted and completely disclose their information when goods is complementary; if the R&D stage is cooperative, no matter the goods is substituted or complementary, the firms always disclose their information.