L-A Busch | Department of Economics | University of Waterloo

Manuscripts:

Well... the pipeline is almost empty!
That's what a sabbatical is for.

Why aren't there more R&D Joint Ventures?
with Abhinay Muthoo
Abstract: Why are there are not more R&D joint ventures? We provide an answer to this question based on two key ideas. The principal idea is that such ventures may diminish the power of a some firms in the product market. The second is that certain kinds of transaction costs are present, which do not allow for this deteriorating market power to be compensated for. We show that the larger the shift in the firms' relative market power following an R&D joint venture, the more likely it is that such (efficiency-enhancing) R&D joint ventures will not take be undertaken.
Available as PDF file.

Lutz-Alexander Busch