Partnership in Open Innovation

• BSE Working Paper: 112205 | September 15
• Keywords: Firm agreements , learning , Open Innovation
• JEL codes: D21, D43, L1
• Firm agreements
• learning
• Open Innovation

This paper aims at assessing the importance of the initial technological endowments when firms decide to create R&D agreements. We study a Bertrand duopoly where firms evaluate the returns of an agreement according to its length. A learning process allows us to depict a close connection between firms’ technology and the possibility to achieve a positive outcome from creating an agreement. Moreover, as far as learning is modeled as an iterative process, a suitable set of initial conditions is the basic factor leading to successful ventures.