Keywords
R&D
Cost-Reduction
Cost-Reduction
How to Cite
Frank, M. (2011). Price-Cap Regulation and The Incentive To Cooperate In Research. Journal of Business Strategies, 28(1), 81–95. https://doi.org/10.54155/jbs.28.1.81-95
Abstract
This paper considers the impact of price-cap regulation on R&D and the
incentive of firms to form research joint ventures. Using a symmetric two-stage
duopoly model of cost-reducing R&D with multiple forms of research cooperation,
we find that R&D is greatest when firms fully cooperate in research and share all
research knowledge. Price-cap regulation, however, appears to have a small but
negative effect on R&D, leading to lower total welfare.
This article is distributed using a Creative Commons Attribution-NonCommercial 4.0 license. Copyright remains with the author(s).