Kaz Miyagiwa and Yuka Ohno

"Sequencing strategically: wage negotiations under oligopoly"
JEL codes: L1; O3
Keywords: stochastic innovation; cooperative R&D; research joint ventures; technology spillovers

Abstract: This paper extends the line of research on cooperation in R&D in an oligopoly with spillovers. The model has three new features. It introduces uncertainty, focuses on spillover of innovation instead of spillover of R&D efforts, and offers a new definition of the research joint venture (RJV). The RJV is an arrangement to coordinate R&D efforts and also to share the innovation discovered by one firm. We find that firms form an RJV only if the innovaiton raises flow industry profit, but independently of the speed of spilloves and the degree of uncertainty. The model is robust when extended to allow for licensing, the single lab joint venture, endogenous spillovers and R&D effort spilloves.