Spillover feedback loops and strategic complements in R&D

Abstract

This paper studies, in a two‐period model, the effects of knowledge spillovers among product market competitors on R&D levels. It argues that when firms' R&D decisions are strategic complements, in industries in which spillovers increase the marginal productivity of a firm's R&D, both incoming and outgoing spillovers spur R&D in equilibrium. Outgoing spillovers can foster innovation even in a homogeneous‐product industry. In these industries, the intellectual property law should be such that facilitates knowledge diffusion. If firms have power in deciding the level of knowledge spillovers, we show that a firm will choose to disclose its knowledge to its product market competitors.

Network compatibility, intensity of competition and process R&D: A generalization

“…Existing studies on process R&D in network goods oligopoly assumes that k ∈ {0, β} and, thus, focuses only strategic substitutability of R&D investments. Considering nonnetwork goods oligopoly Chalioti (2019) and Amir and Knauff (2008) argue that firms' R&D investments can be strategic complements in case R&D spillover is sufficiently high.…”

“…A number of studies have attempted to compare equilibrium investments in cost reducing process R&D under Cournot and Bertrand competition. Considering non-network goods oligopoly, Qiu (1997) and Lin and Saggi (2002) demonstrate that a Cournot firm always 1 Note that R&D investments can be strategic complements even in case of standard non-network goods oligopoly, provided that there is sufficiently high R&D spillover (Chalioti, 2019;Amir and Knauff, 2008).…”

Peer‐Assisted Learning Is More Effective at Higher Task Complexity and Difficulty

“…However, this superiority is not always observed and it varies with a number of factors (Yetter et al., 2006). It is postulated to be larger in intellectually demanding tasks (Laughlin, Zander, Knievel, & Tan, 2003) that involve coconstruction of knowledge, where multiple learners contribute new knowledge and insights, which in turn increase the knowledge of each contributor, making them more likely to contribute more new knowledge, and so on, creating positive feedback loops or knowledge spillover effects (Chalioti, 2019; Chi & Wylie, 2014; Cooper & Kagel, 2005).…”

Income inequality and technological progress: The effect of R&D incentives, integration, and spillovers

“…The case of large spillovers is particularly sensitive. For instance, Amir (2000) expresses some concerns regarding the validity of the d'Aspremont and Jacquemin approach in dealing with large spillover values, while Chalioti (2019) argues that when the R&D decisions are strategic complements, larger spillovers may foster innovation.…”