This paper analyzes the effects of cooperative R&D arrangements in a model with stochastic R&D and output spillovers. Our main innovation is to allow for free entry in both the R&D race and product market. Moreover, in contrast with the literature, we assume that cooperative R&D arrangements do...

We compile an IO toolkit for aggregative games and use inclusive best reply functions to deliver oligopoly comparative statics and ranking of firms' actions and profits. Aggregative games apply to additively separable direct and indirect preferences, as well as generalized quadratic forms....