The Gains from Cooperative R&D with a Concave Technology and Spillovers

We reassess the respective gains from R&D cooperation and competition in a Cournot duopoly where firms adopt a concave cost-reducing R&D technology. Cooperation, in the form of either a cartel or a joint venture, is always profitable for firms and, contrary to the previous literature on the same topic, (i) no corner solutions emerge and (ii) R&D cooperation is socially superior to independent ventures for any spillover level, provided the cost of R&D financing is sufficiently high