RJVs in Product Innovation and Cartel Stability

Arbeitspapier

We characterise the interplay between firms' decision in product development undertaken through a research joing venture (RJV), and the nature of their ensuing market behaviour. Participant firms in an RJV face a trade-off between saving the costs of product innovation by developing similar products to one another, e.g. by sharing most of the basic components of their products, and investing higher initial efforts in product innovation in order to develop more distinct products. We prove that the more the firms' products are distinct and thus less substitutable, the easier their collusion is to sustain in the marketing supergame, either in prices (Bertrand) or in quantities (Cournot). This gives rise to a non-monotone and discontinuous relationship between firms' product portfolio and their intertemporal preferences.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 272

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lambertini, Luca ; Poddar, Sougata ; Sasaki, Dan
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 1997

Further information

• DOI: doi:10.6092/unibo/amsacta/5038
• Handle: http://hdl.handle.net/10419/159115
• Last update: 10.03.2025, 11:41 AM CET