In this paper, a model of product innovation is developed that endogenizes the degree of cooperation.
Cooperation increases the quality of the product but it also makes the new products more similar.
The increasing substitutability of the product intensifies competition in the production stage. Thus, it may not be optimal to share all of the product information. The basic model is altered to allow for a joint-selling agreement and for tariffs or transport costs. Before downloading any of the electronic versions below you should read our statement on copyright . Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.