R&D competition and cooperation with asymmetric spillovers in an oligopoly market

Abstract

This study examines the effects of asymmetric spillovers on R&D investment in an oligopoly market. We obtain four important results. First, R&D is affected not only by incoming spillovers from the rival but also by outgoing spillovers to the rival. Second, the effect of incoming spillovers is greater than that of outgoing spillovers. Third, an increase in the degree of market competitiveness is likely to create social preference for R&D competition compared to R&D cooperation. Fourth, an increase in spillover asymmetry between firms increases the difference in R&D investments between asymmetric and symmetric spillovers.