R&D cooperation or competition?

Abstract The economic literature provides empirical evidence of the existence of technological cartels, such as research joint ventures or deliberate sharing of technological knowledge. Our aim is to answer to the questions: (i) is the creation of technological cartels beneficial from a social welfare point of view? and (ii) do the firms have private incentives to form such cartels? We depart from the approach adopted in the literature by considering a dynamic model and allowing for the possibility that the firms are asymmetric. The results show the importance of the degree of existing technological spillovers and stress the differences between the symmetric and asymmetric cases.