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Does sequential decision-making trigger collective investment in automobile R&D? Experimental evidence

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  • Buchmann, Tobias
  • Haering, Alexander
  • Kudic, Muhamed
  • Rothgang, Michael

Abstract

We conduct a framed laboratory experiment to gain in-depth insights on factors that drive collective research and development efforts among firms located along the automotive value chain. In particular, we employ a public goods experiment and analyze the influence of sequential decision-making on the willingness to engage in cooperation and on economic welfare. By using a linear value chain setting with three suppliers and one OEM, we analyze vertical R&D cooperation. Our results reveal that contributions increase in situations with sequential decision-making and that sequential decisions increase the overall welfare, even in case of unequally distributed R&D budgets.

Suggested Citation

  • Buchmann, Tobias & Haering, Alexander & Kudic, Muhamed & Rothgang, Michael, 2018. "Does sequential decision-making trigger collective investment in automobile R&D? Experimental evidence," Ruhr Economic Papers 785, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:785
    DOI: 10.4419/86788913
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    References listed on IDEAS

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    More about this item

    Keywords

    public goods experiment; collective innovation; automobile industry; value chain; innovation barriers; sequential decision making;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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