On the prisoner’s dilemma in R&amp;D with input spillovers and incentives for R&amp;D cooperation

Burr, Chrystie; Knauff, Małgorzata; Stepanova, Anna

doi:10.1016/j.mathsocsci.2013.05.004

Cited by 23 publications

(16 citation statements)

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“…When non-negligible spillovers exist, the AJ model exaggerates the impact of cost-reducing R&D, hence Amir (2000) argues that the KMZ model is more appropriate. Hauenschild (2003), Hinloopen & Vendekerchhove (2009), Stepanova and Tesoriere (2011) and Burr et al (2013) further explore the differences between input and output technological spillovers within the non-tournament R&D literature. spillovers operate, leads to significant differences in policy implications and implementation.…”

Section: Introductionmentioning

confidence: 99%

Green Technology and Optimal Emissions Taxation

McDonald

Poyago‐Theotoky

2014

SSRN Journal

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We examine the impact of an optimal emissions tax on research and development of emission reducing green technology (E-R&D) in the presence of R&D spillovers. We show that the size and effectiveness of the optimal emissions tax depends on the type of the R&D spillover: input or output spillover. In the case of R&D input spillovers (where only knowledge spillovers are accounted for), the optimal emissions tax required to stimulate R&D is always higher than when there is an R&D output spillover (where abatement and knowledge spillovers exist si- * The authors gratefully acknowledge Alfred Endres and Emmanuel Petrakis for discussions and suggestions as well as participants at EAERE 2012, PET 2012 and JEI 2012 for their comments. The usual disclaimer applies.† McDonald acknowledges funding from a Global Change Institute Small Grant and UQ Early Career Researcher Grant.‡ Corresponding Author. School of Economics, La Trobe University, Melbourne, VIC 3086, Australia. Tel: +61 (0)3 9479 1409, Fax: +61 (0) 9479 5971 1 multaneously). We also find that optimal emissions taxation and cooperative R&D complement each other when R&D spillovers are small, leading to lower emissions.

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Section: Introductionmentioning

confidence: 99%

Green Technology and Optimal Emissions Taxation

McDonald

Poyago‐Theotoky

2014

SSRN Journal

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“…It is widely accepted that cartels create losses in consumer surplus and total welfare [Whelan, 2013;Hellwig, Hüschelrath, 2017]. An exception is R&D cartels [d 'Aspremont, Jacquemin, 1988;Kamien et al, 1992;Kamien, Zang, 2000;Amir et al, 2011ab;Burr et al, 2013], which usually enhance welfare by promoting innovation compared with R&D competition. Under an R&D cartel, firms coordinate their R&D investments in order to maximise a joint profit, but the firms remain competitors in the product market and take decisions on the product price or output unilaterally [Kamien et al, 1992].…”

Section: Introductionmentioning

confidence: 99%

“…Prominent examples of symmetric games are the prisoner's dilemma, chicken game and the trust dilemma (assurance or stag hunt game) [cf., Farahani, Sheikhmohammady, 2014;Płatkowski, 2017]. Some authors have already identified a prisoner's dilemma in firms' process R&D under quantity competition [Amir et al, 2011ab;Burr et al, 2013]. The prisoner's dilemma explains why firms refrain from process R&D investments.…”

Section: Introductionmentioning

confidence: 99%

A Note on Patents and Leniency

Karbowski¹

2020

GNPJE

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The purpose of this note is to investigate the relationship between patents and market collusion. Specifically, by using game theory tools, it is shown that patents can act as a leniency mechanism, i.e., they can enable firms to leave a cartel without the risk of retaliation. However, the socially beneficial role of patents is limited because Bertrand competition itself breaks the collusion via the existence of a prisoner's dilemma between sufficiently myopic market rivals. In the prisoner's dilemma, two social tensions, fear and greed, make firms deviate from collusion. Patenting breaks the collusion, but at the social cost of a temporary patent monopoly in the product market.

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“…Based on the types of collaborative partnership, R&D cooperation has been divided into horizontal and vertical R&D cooperation. Many of research works have been done about these two types of R&D cooperation [15][16][17][18][19][20]. Although firms may arrange their R&D inputs to realize the maximization of the total profit of the two firms, opportunism may still prevail in these two types of R&D cooperation.…”

Section: Introductionmentioning

confidence: 99%

Stability Analysis of R&D Cooperation in a Supply Chain

Liang

Duan

et al. 2015

Mathematical Problems in Engineering

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R&D outsourcing becomes the often-adopted strategy for firms to innovate. However, R&D cooperation often ends up with failure because of its inherent quality of instability. One of the main reasons for cooperation failure is the opportunistic behavior. As the R&D contract between firms is inherently incomplete, opportunistic behavior always cannot be avoided in the collaborative process. R&D cooperation has been divided into horizontal and vertical types. This paper utilizes game theory to study opportunistic behavior in the vertical R&D cooperation and analyzes the equilibrium of the cooperation. Based on the equilibrium and numerical results, it is found that the vertical R&D cooperation is inherently unstable, and the downstream firm is more likely to break the agreement. The level of knowledge spillovers and the cost of R&D efforts have different effects on firms’ payoffs. When the level of knowledge spillover is low or the cost of R&D efforts is high, mechanisms such as punishment for opportunism may be more effective to guarantee the stability of cooperation.

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On the prisoner’s dilemma in R&D with input spillovers and incentives for R&D cooperation

Cited by 23 publications

References 24 publications

Green Technology and Optimal Emissions Taxation

Green Technology and Optimal Emissions Taxation

A Note on Patents and Leniency

Stability Analysis of R&D Cooperation in a Supply Chain

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