Does sequential decision-making trigger collective investment in automobile R&D? Experimental evidence

Tobias Buchmann, Alexander Haering, Muhamed Kudic and Michael Rothgang

No 785, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: We conduct a framed laboratory experiment to gain in-depth insights on factors that drive collective research and development efforts among firms located along the automotive value chain. In particular, we employ a public goods experiment and analyze the influence of sequential decision-making on the willingness to engage in cooperation and on economic welfare. By using a linear value chain setting with three suppliers and one OEM, we analyze vertical R&D cooperation. Our results reveal that contributions increase in situations with sequential decision-making and that sequential decisions increase the overall welfare, even in case of unequally distributed R&D budgets.

Keywords: public goods experiment; collective innovation; automobile industry; value chain; innovation barriers; sequential decision making (search for similar items in EconPapers)
JEL-codes: C92 D79 O31 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-cdm, nep-com, nep-exp, nep-ino and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:785

DOI: 10.4419/86788913

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