Journal Article
No. 2010-1 | January 11, 2010
Endogenous Technology Sharing in R&D Intensive Industries


This paper analyses endogenous formation of technology sharing coalitions with asymmetric firms. Coalition partners produce complementary technology advancements, although firms do not co-operate on R&D investment level or in the product market. The equilibrium coalition outcome is either between the two most efficient firms, or a coalition with all three firms. The two-firm coalition is the preferred outcome of a welfare maximising authority if ex ante marginal cost is sufficiently high, and the three-firm coalition is preferred otherwise. Furthermore, we show that the equilibrium outcomes result in the lowest total R&D investment of all possible outcomes. Aircraft engine manufacturing provides a case study, and indicates the importance of antitrust issues as an addition to the theory.

JEL Classification:

L11, L13


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Cite As

Derek J. Clark and Jan Yngve Sand (2010). Endogenous Technology Sharing in R&D Intensive Industries. Economics: The Open-Access, Open-Assessment E-Journal, 4 (2010-1): 1–48.

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