This paper sets up a three-stage model to analyze firms' optimal behaviors in a RJV. Firms choose the financial structure first, then R&D investment in the RJV, and finally the output level in a Cournot market. Under uncertain cost reduction of R&D, the use of debt commits an aggressive stance---higher R&D effort and output level---but firms may not be better off. Among different structures, the leveraged firm gains the least profit in an asymmetric industry, but gains the most profit in a symmetric leveraged industry. Both using debt and both not using debt are the two subgame perfect equilibria, and both suing debt survives as a focal equilibrium. This is in sharp contrast to the prisoner's dilemma outcome in Brander and Lewis.
關聯:
產業經濟學國際學術研討會論文集=Proceedings of the 2000 Taipei International Conference on Industrial Economics，頁952-974
