Cooperative and Noncooperative R&D in Vertically Related Markets

X. Henry Wang ; Bill Z. Yang

Associate Professor, Department of Economics, University of Missouri, Columbia, MO 65211, USA, Tel: +1-573-882-4954, Fax: +1-573-882-2697 wangX@missouri.edu
Assistant Professor, Department of Finance and Economics, Georgia Southern University, Statesboro, GA 30460, USA, Tel: +1-912-681-5727, Fax: +1-912-871-1835 billyang@gasou.edu

JEL Classigication: D43, L13

Abstract

This paper compares R&D cooperation and R&D competition in a vertical market structure with an intermediate good producer and a final good producer. It is shown that cooperative R&D generates more R&D efforts, higher output and lower consumer price than non-cooperative R&D in a vertically related market.

Keywords:

Cooperative R&D, Noncooperative R&D, Vertical market

Acknowledgments

We wish to thank anonymous referees for their helpful comments.

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