IDEAS home Printed from https://ideas.repec.org/a/bla/scotjp/v61y2014i2p196-210.html
   My bibliography  Save this article

Feasibility, Stability, and Multiple Research Joint Ventures

Author

Listed:
  • Zhiyong Yao
  • Bingyong Zheng

Abstract

type="main" xml:id="sjpe12041-abs-0001"> We study multiple research joint ventures (RJVs) using a repeated game with imperfect monitoring. Compared with the single joint venture case, we show that cooperation in multiple joint ventures creates two advantages for participating firms. First, by linking decisions together across all joint ventures firms can mitigate the likelihood of cooperation breakdowns following bad R&D outcomes. Second, as the incentive cost to sustain cooperation is independent of the number of joint ventures, the economy of scale effect reduces the efficiency loss due to imperfect monitoring.

Suggested Citation

  • Zhiyong Yao & Bingyong Zheng, 2014. "Feasibility, Stability, and Multiple Research Joint Ventures," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(2), pages 196-210, May.
    • Handle: RePEc:bla:scotjp:v:61:y:2014:i:2:p:196-210
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/sjpe.2014.61.issue-2
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
    2. Bruce Kogut, 1988. "Joint ventures: Theoretical and empirical perspectives," Strategic Management Journal, Wiley Blackwell, vol. 9(4), pages 319-332, July.
    3. Jimmy Chan & Bingyong Zheng, 2011. "Rewarding improvements: optimal dynamic contracts with subjective evaluation," RAND Journal of Economics, RAND Corporation, vol. 42(4), pages 758-775, December.
    4. Drew Fudenberg & David Levine & Eric Maskin, 2008. "The Folk Theorem With Imperfect Public Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 12, pages 231-273, World Scientific Publishing Co. Pte. Ltd..
    5. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
    6. Zhiyong Yao, 2011. "Bribe to Cooperate," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 32, pages 535-544, December.
    7. William Fuchs, 2007. "Contracting with Repeated Moral Hazard and Private Evaluations," American Economic Review, American Economic Association, vol. 97(4), pages 1432-1448, September.
    8. Curtis Eaton & Mukesh Eswaran, 1997. "Technology-Traditing Coalitions in Supergames," RAND Journal of Economics, The RAND Corporation, vol. 28(1), pages 135-149, Spring.
    9. Reuer, Jeffrey J. & Zollo, Maurizio, 2005. "Termination outcomes of research alliances," Research Policy, Elsevier, vol. 34(1), pages 101-115, February.
    10. Snyder, Christopher M. & Vonortas, Nicholas S., 2005. "Multiproject contact in research joint ventures: evidence and theory," Journal of Economic Behavior & Organization, Elsevier, vol. 58(4), pages 459-486, December.
    11. Katrien Kesteloot & Reinhilde Veugelers, 1995. "Stable R&D Cooperation with Spillovers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 651-672, December.
    12. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
    13. Abreu, Dilip & Milgrom, Paul & Pearce, David, 1991. "Information and Timing in Repeated Partnerships," Econometrica, Econometric Society, vol. 59(6), pages 1713-1733, November.
    14. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    15. Kogut, Bruce, 1989. "The Stability of Joint Ventures: Reciprocity and Competitive Rivalry," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 183-198, December.
    16. Seung Ho Park & Gerardo R. Ungson, 2001. "Interfirm Rivalry and Managerial Complexity: A Conceptual Framework of Alliance Failure," Organization Science, INFORMS, vol. 12(1), pages 37-53, February.
    17. Nicholas S. Vonortas, 2000. "Multimarket contact and inter-firm cooperation in R&D," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 243-271.
    18. Yannis Caloghirou & Stavros Ioannides & Nicholas S. Vonortas, 2003. "Research Joint Ventures," Journal of Economic Surveys, Wiley Blackwell, vol. 17(4), pages 541-570, September.
    19. Ranjay Gulati & Dovev Lavie & Harbir Singh, 2009. "The nature of partnering experience and the gains from alliances," Strategic Management Journal, Wiley Blackwell, vol. 30(11), pages 1213-1233, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duso, Tomaso & Pennings, Enrico & Seldeslachts, Jo, 2010. "Learning dynamics in research alliances: A panel data analysis," Research Policy, Elsevier, vol. 39(6), pages 776-789, July.
    2. Cabral, Luis M. B., 2000. "R&D cooperation and product market competition," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1033-1047, October.
    3. Gamal Atallah, 2003. "Information sharing and the stability of cooperation in research joint ventures," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(6), pages 531-554.
    4. Lhuillery, Stéphane & Pfister, Etienne, 2009. "R&D cooperation and failures in innovation projects: Empirical evidence from French CIS data," Research Policy, Elsevier, vol. 38(1), pages 45-57, February.
    5. Belderbos, Rene & Carree, Martin & Diederen, Bert & Lokshin, Boris & Veugelers, Reinhilde, 2004. "Heterogeneity in R&D cooperation strategies," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1237-1263, November.
    6. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, September.
    7. Zhao, Rui R., 2012. "Renegotiation and conflict resolution in relational contracting," Games and Economic Behavior, Elsevier, vol. 75(2), pages 964-983.
    8. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
    9. Hongbin Cai & Ichiro Obara, 2009. "Firm reputation and horizontal integration," RAND Journal of Economics, RAND Corporation, vol. 40(2), pages 340-363, June.
    10. Duso, Tomaso & Pennings, Enrico & Seldeslachts, Jo, 2007. "The Dynamics of Research Joint Ventures: A Panel Data Analysis," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 221, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    11. Matsushima, Hitoshi, 2001. "Multimarket Contact, Imperfect Monitoring, and Implicit Collusion," Journal of Economic Theory, Elsevier, vol. 98(1), pages 158-178, May.
    12. Santamaría Sánchez, Luis & Surroca Aguilar, Jorge, 2004. "Idoneidad del socio tecnológico : un análisis con datos de panel," DEE - Documentos de Trabajo. Economía de la Empresa. DB db040704, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    13. Hongbin Cai & Ichiro Obara, 2009. "Firm reputation and horizontal integration," RAND Journal of Economics, RAND Corporation, vol. 40(2), pages 340-363, June.
    14. Müller, Dirk, 2010. "Alliance Coordination, Dysfunctions, and the Protection of Idiosyncratic Knowledge in Strategic Learning Alliances," EconStor Preprints 41039, ZBW - Leibniz Information Centre for Economics.
    15. Fier, Andreas & Aschhoff, Birgit & Löhlein, Heide, 2006. "Detecting Behavioural Additionality: An Empirical Study on the Impact of Public R&D Funding on Firms' Cooperative Behaviour in Germany," ZEW Discussion Papers 06-037, ZEW - Leibniz Centre for European Economic Research.
    16. Schmidt, Tobias, 2007. "Motives for Innovation Co-operation? Evidence from the Canadian Survey of Innovation," ZEW Discussion Papers 07-018, ZEW - Leibniz Centre for European Economic Research.
    17. W. Bentley MacLeod & Teck Yong Tan, 2016. "Optimal Contracting with Subjective Evaluation: The Effects of Timing, Malfeasance and Guile," NBER Working Papers 22156, National Bureau of Economic Research, Inc.
    18. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
    19. Kobayashi, Hajime & Ohta, Katsunori, 2012. "Optimal collusion under imperfect monitoring in multimarket contact," Games and Economic Behavior, Elsevier, vol. 76(2), pages 636-647.
    20. Niedermayer, Andras & Wu, Jianjun, 2013. "Breaking up a research consortium," International Journal of Industrial Organization, Elsevier, vol. 31(4), pages 342-353.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:scotjp:v:61:y:2014:i:2:p:196-210. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/sesssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.