Project Choice and Risk in R&D

Gerlach, Heiko ; Roende, Thomas ; Stahl, Konrad

Document Type: Article
Year of publication: 2005
The title of a journal, publication series: The Journal of Industrial Economics
Volume: 53
Issue number: 1
Page range: 53-81
Place of publication: Oxford
Publishing house: Blackwell Publ.
ISSN: 0022-1821
Publication language: English
Institution: School of Law and Economics > VWL, Mikroökonomik (Stahl K.1988-2009, Em)
Subject: 330 Economics
Abstract: We introduce stochastic R&D in the Hotelling model and show|that if the technical risk is sufficiently high, all firms focus on the most valuable market segment. We then endogenize technical risk by allowing firms to choose between a safe and a risky R&D technology. Firms either both target the most attractive market with at least one firm using the risky technology or they choose different nicheprojects and both apply the safe technology. R&D spillovers lead to more differentiated R&D projects and patent protection to less. Project coordination within an RJV implies more differentiation, and may be welfare-improving.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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