Rev Ind Organ (2008) 33:177–184
A Further Note on Endogenous Spillovers
in a Non-tournament R&D Duopoly
Published online: 25 September 2008
© Springer Science+Business Media, LLC. 2008
Abstract This note considers the paper of Poyago-Theotoky (1999) on strategic
R&D with endogenous spillovers. It proves through an example that, under R&D col-
lusion, optimality sometimes requires either minimal or asymmetric spillovers. It also
provides a simple sufﬁcient condition for optimal spillovers between colluding ﬁrms
to involve maximal spillovers (i.e., complete sharing of information).
Keywords Endogenous asymmetry · Endogenous spillovers · R&D collusion
JEL Classiﬁcation O30 · L13
A research joint venture (RJV) is a group of ﬁrms that organize their R&D activity
to achieve a common objective (often joint proﬁt maximization), while usually main-
taining a non-cooperative conduct in the product market. R&D cooperation through
RJV’s has experienced a global boom during the last quarter century,
and is currently
relevant in industries such as information technology, biotechnology, raw materials,
electronics, communications, chemicals, transportation equipments and others.
RJV’s act as coordination devices but are of potential beneﬁt to consumers through
their distributing innovative results among members. This fact has been ﬁrst pointed
See, among others, Caloghirou et al. (2003).
See National Science Board (2002).
A. Tesoriere (
Dipartimento di Scienze Economico Aziendali e Finanziarie, Facoltà di Economia, Università degli
Studi di Palermo, Vpiano, Ediﬁcio 13, Viale delle Scienze, 90128 Palermo, Italy