Comparison of cooperative R&D arrangements among competitive firms

There has been a lot of research in the field of cooperative R&D and a lot has asserted that `cartelization´ dominates all other forms of cooperative R&D. But cartelization can harm both the competition and the consumer by facilitating collusion among the participating firms. This may be the reason why the suggestions of previous research could not be readily implemented in a real world. The authors´ model is built on the R&D classification of Kamien et al. (1992); R&D competition, R&D cartelization, RJV competition, and RJV cartelization, but with the consideration of input sharing in addition to output sharing. Furthermore, to fully explore the effect of competition they use a conjectural variation model instead of a conventional Cournot or Bertrand model. The focus of the analysis is to explore which type yields the best outcome when degree of competition, spillover rate, and input/output sharing rate are simultaneously considered. They show that unlike Kamien et al. (1992), a dominant type of R&D arrangement is not uniquely obtained, rather heavily depends on the parameters (degree of competition, spillover rate, and input/output sharing rate). RJV-competition that have the least desirable outcome in Kamien et al. (1992) may have the best outcome in an appropriate range of input sharing. Also it is shown that R&D-competition dominates all the other R&D arrangements under a low rate of spillover and high competition