Cooperation in R&D: patenting, licensing and contracting

In this paper we review some of the literature on R&D collective arrangements using game theoretical concepts and considering various settings, involving either complete or incomplete contracts. Patent protection, licensing in various industry contexts as well as the role of various factors such as product differentiation, innovation magnitude and asymmetric information are considered. The relation of innovative activity to the intensity of competition is reconsidered and the benefit of various types of cooperative R&D-agreements in presence of externalities are reviewed. The last two sections are devoted to contracting issues.