Cooperative R&D with Endogenous Technology Differentiation |
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| Authors: | María José Gil Moltó Nikolaos Georgantzís Vicente Orts |
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| Institution: | Economics Department Loughborough University Leicestershire Le11 3TU, UK; LEE and Economics Department Universitat Jaume I Castellón 12071, Spain; IEI, LEE and Economics Department Universitat Jaume I Castellón 12071, Spain |
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| Abstract: | We study a nontournament R&D duopoly. Before the standard R&D investment and quantity-setting stages, we consider a stage in which firms choose their R&D technologies. Spillovers negatively depend on R&D technology differentiation. We show that, in equilibrium, firms will choose identical or very similar R&D processes. Such equilibria may entail less differentiation than would be dictated by social welfare maximization. |
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