R&D rivalry Vs R&D cooperation under uncertainty

We consider whether or not R&D expenditures will be greater or less under a research joint venture (RJV) than under R&D competition and whether or not firms will always find the former preferable to the latter. With imitation difficult, the answer to the latter question depends on the relative strength of conflicting forces : whilst cooperation will increase expected payoffs through a positive “coordination effect” it will also intensify the competition faced by the innovator in the product market by enabling firms to gain access to the most recent technology. With imitation easy, on the other hand, firms will always prefer an RJV to R&D competition.