Research and Development

Revision with unchanged content. In high-tech industries Research and Development (R&D) is the most im­por­tant origin of competitive advantage. The underlying investment decisions are no­tably complex. First high-tech industries are highly concentrated such that mu­tual observation and reactions among competitors need to be taken into account. Secondly the knowledge created through R&D may not only benefit its originator but may spill over to competitors. This book offers novel ana­lyses of four questions. Should competitors follow similar research paths as to maximise knowledge flows or, to the contrary, minimize spillovers through spe­cific paths? What is the optimal mix of R&D aimed to create original in­no­va­tion and R&D targeted to absorb others' innovations? Under what cir­cum­stan­ces can incumbents use their ability to absorb external R&D as to threaten innovative entrants? Should competing firms share knowledge with a common supplier who may diffuse it? Basic game theory is applied and the book addresses researchers, advanced students, policy-makers and R&D stra­te­gists.