TY  - GEN
AB  - We study investments in R&D and the formation of R&D clusters of firms
which are competitors in the market. In a three stage game, firms first decide on
the budget allocated to their R&D department, then form research clusters and
finally compete in quantities. The second stage cluster formation is modeled by
the unanimity game introduced in Bloch(1995). We show that for any distribution
of R&D investments, an equilibrium of the second stage cluster formation exists
and is generically unique up to a permutation of firms which chose the same
investment. Restricting to two investment levels in the first stage, we provide a
complete characterization of the equilibria of the three stage game. We show that
for some range of investment costs, equilibria with no-investment co-exist with
equilibria where a large fraction or even all firms invest in R&D. Furthermore, in
the high-investment equilibrium firms over{invest compared to a scenario where
research clusters are ex-ante fixed and also compared to the welfare optimum.
DA  - 2016
DO  - 10.4119/unibi/2901658
KW  - R&D
KW  - cluster formation
KW  - oligopoly
KW  - etace_network_formation
KW  - etace_innovation_economics
LA  - eng
PY  - 2016
SN  - 2196-2723
SP  - 38-
TI  - R&D Investments Under Endogenous Cluster Formation
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29016588
Y2  - 2024-12-26T07:00:22
ER  -