R&D COOPERATION WITH UNIT-ELASTIC DEMAND |
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| Authors: | Georg Götz Anna Hammerschmidt† |
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| Institution: | Department of Economics, Justus-Liebig-University Giessen, Germany;, and Department of Economics, Vienna University of Economics and Business Administration, Austria |
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| Abstract: | The present paper shows that R&D cooperation leads to the monopoly outcome in terms of price and quantity if demand is unit-elastic. If the demand function exhibits an upper bound for the willingness to pay, R&D cooperation is inferior to a scenario in which firms cooperate both in their R&D and their output decision. |
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| Keywords: | cartelization R&D cooperation spillovers |
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