Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159115
Authors: 
Lambertini, Luca
Poddar, Sougata
Sasaki, Dan
Year of Publication: 
1997
Series/Report no.: 
Quaderni - Working Paper DSE 272
Abstract: 
We characterise the interplay between firms' decision in product development undertaken through a research joing venture (RJV), and the nature of their ensuing market behaviour. Participant firms in an RJV face a trade-off between saving the costs of product innovation by developing similar products to one another, e.g. by sharing most of the basic components of their products, and investing higher initial efforts in product innovation in order to develop more distinct products. We prove that the more the firms' products are distinct and thus less substitutable, the easier their collusion is to sustain in the marketing supergame, either in prices (Bertrand) or in quantities (Cournot). This gives rise to a non-monotone and discontinuous relationship between firms' product portfolio and their intertemporal preferences.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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