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Optimal Technology Sharing Strategies in Dynamic Games of R&D

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  • Nisvan Erkal
  • Deborah Minehart

Abstract

A question central to R&D policy making is the impact of competition on cooperation. This paper builds a theoretical foundation for the dynamics of knowledge sharing in private industry. We model an uncertain research process and ask how the incentives to license intermediate steps to rivals change over time as the research project approaches maturity. Such a dynamic approach allows us to analyze the interaction between how close the firms are to product market competition and how intense that competition is. We uncover a basic dynamic of sharing such that firms are less likely to share as they approach the product market. This dynamic is driven by a trade‐off between three effects: the rivalry effect, the duplication effect and the speed effect. We show that this dynamic can be reversed when duopoly profits are sufficiently low or when the firms have asymmetric research capabilities. We also explore the implications of the model for patent policy, and compare policies targeting early research outcomes with policies targeting late research outcomes.

Suggested Citation

  • Nisvan Erkal & Deborah Minehart, 2014. "Optimal Technology Sharing Strategies in Dynamic Games of R&D," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 149-177, March.
    • Handle: RePEc:bla:jemstr:v:23:y:2014:i:1:p:149-177
    DOI: 10.1111/jems.12042
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    References listed on IDEAS

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    Cited by:

    1. Jeitschko Thomas D. & Zhang Nanyun, 2014. "Adverse Effects of Patent Pooling on Product Development and Commercialization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 14(1), pages 27-57, January.
    2. Hong, Xianpei & Govindan, Kannan & Xu, Lei & Du, Peng, 2017. "Quantity and collection decisions in a closed-loop supply chain with technology licensing," European Journal of Operational Research, Elsevier, vol. 256(3), pages 820-829.
    3. Sitnicki Maksym, 2018. "Exploration of the role of business schools in the development of world-class research universities," Technology audit and production reserves, 1(39) 2018, Socionet;Technology audit and production reserves, vol. 1(5(39)), pages 36-45.
    4. Qian Li & Yuanfei Kang & Lingling Tan & Bo Chen, 2020. "Modeling Formation and Operation of Collaborative Green Innovation between Manufacturer and Supplier: A Game Theory Approach," Sustainability, MDPI, vol. 12(6), pages 1-20, March.
    5. Cary Deck & Erik O. Kimbrough, 2017. "Experimenting with Contests for Experimentation," Southern Economic Journal, John Wiley & Sons, vol. 84(2), pages 391-406, October.
    6. Qian Li & Yuanfei Kang, 2019. "Knowledge Sharing Willingness and Leakage Risk: An Evolutional Game Model," Sustainability, MDPI, vol. 11(3), pages 1-21, January.
    7. Zhang, Qiao & Zhang, Jianxiong & Zaccour, Georges & Tang, Wansheng, 2018. "Strategic technology licensing in a supply chain," European Journal of Operational Research, Elsevier, vol. 267(1), pages 162-175.
    8. Xiaodan Kong & Qi Xu & Tao Zhu, 2019. "Dynamic Evolution of Knowledge Sharing Behavior among Enterprises in the Cluster Innovation Network Based on Evolutionary Game Theory," Sustainability, MDPI, vol. 12(1), pages 1-23, December.

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