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R&D COOPERATION WITH UNIT‐ELASTIC DEMAND
Author(s) -
Götz Georg,
Hammerschmidt Anna
Publication year - 2009
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.2008.00292.x
Subject(s) - monopoly , economics , microeconomics , outcome (game theory) , unit (ring theory) , demand curve , function (biology) , derived demand , mathematical economics , mathematics , mathematics education , evolutionary biology , biology
The present paper shows that R&D cooperation leads to the monopoly outcome in terms of price and quantity if demand is unit‐elastic. If the demand function exhibits an upper bound for the willingness to pay, R&D cooperation is inferior to a scenario in which firms cooperate both in their R&D and their output decision.