Symmetric research joint ventures: Cooperative substitutes and complements

Abstract

We introduce the concepts of cooperative substitutes and complements, and use them to explain
\nwhen all firms in a research joint venture will choose equal levels of R&D. We show that the secondorder
\nconditions for a symmetric optimum take a particularly simple form, ruling out both excessive
\ncooperative substitutability and excessive cooperative complementarity, and nesting conditions
\nalready derived in the literature. Finally we apply our results to the comparison between cooperative
\nand non-cooperative R&D, and show in an important special case that asymmetric outcomes are only
\noptimal for a very limited range of parameter values.