The theoretical discussion concerning the question whether the incumbent or the (potential) entrant invests more into R&D has attracted considerable interest. This paper reports the results of an empirical study on this question using data of about 3500 German firms over the years 1992 to 1995....

This paper develops a three stage oligopoly game for R&D cooperation, R&D expenditure and product market competition. In the first stage, firms decide whether or not to conduct R&D in cooperation with other firms. In the second stage the level of R&D investment is determined. Finally, firms...