Market Structure and R∧D Joint Ventures: The Case of Product Innovations

Departing from the received fact that research joint venture agreements are allowed on the grounds of a permissive ruling, we study what conditions are necessary for venture partners to carry on RD cooperation to the marketing stage. We treat the case of product innovations exploitable with different usages in unconnected markets. Two main results appear: firms always have incentives for a distribution of varieties, but not always agree on the distribution of products. The condition for the last result to happen gives a useful rule for antitrust authorities relating the degree of sustitutability across varieties and the relative profitability of the markets.