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Quality-improving alliances in differentiated oligopoly

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  • Deroian, Frederic
  • Gannon, Frederic

Abstract

We study rival firms' incentives in quality-improving Research and Development (R&D) networks. The analysis stresses the role of free riding associated to collaboration and three major consequences emerge: R&D efforts decrease with the number of partners, networks of alliances are over-connected as compared to the social optimum and the profitmaximizing number of alliances is possibly non monotonic (decreasing then increasing) with respect to inverse measure of product differentiation.
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  • Deroian, Frederic & Gannon, Frederic, 2006. "Quality-improving alliances in differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 629-637, May.
    • Handle: RePEc:eee:indorg:v:24:y:2006:i:3:p:629-637
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