Work

Coordinating research through research joint ventures

Year: 1993

Type: article

Abstract: In a simple model, we show that a joint venture can implement the rates of investment that maximize joint profit when firms' research abilities are private information. This can be done with budget balance, even though there are participation constraints. There is no conflict between budget balance and participation constraints because firms' payoffs can depend on ex post signals of abilities. The conflict between budget balance and participation constraints is restored when both abilities and rates of investment are unobservable. We give a condition under which the profit-maximizing rates of investment can be implemented if we relax budget balance.

Source: Journal of Public Economics

DOI: 10.1016/0047-2727(93)90083-6

Authors: Neil Gandal, Suzanne Scotchmer

Institutions: Boston University, Tel Aviv University, University of California, Berkeley

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,510

OpenAlex ID: W2021965990

FWCI: 12.16

Cites: 15

Cited by: 63

Related to: 10