Consider an incumbent monopolist faced with potential competitors who can enter the market by developing a substitute, but inferior, technology. What is the incumbent's optimal licensing policy? When, to whom and under what conditions should the incumbent firm license its superior technology?...

We show that the presumed incompatibility of R&D and competition in Spence (1984) is not fundamental, but hinges on a critical modeling choice. Specifically, we show that for a widely used class of R&D technology, that is, the functional form mapping R&D effort into cost reduction, the...

A model is developed that analyzes the effects of uncertainty on the behavior of research and production joint ventures.Following a literature review, the research and development (R&D) environment is defined, and the model, which assumes that joint venture formation, R&D investment, and market...

We examine whether cooperation in R&D leads to product market collusion. Suppose that firms engage in a stochastic R&D race while maintaining the collusive equilibrium in a repeated-game framework. Innovation under competitive R&D creates inter-firm asymmetries, which destabilizes the collusive...