Competition and Cooperation: Striking the Right Balance

Shepherd W.G. , The Economics of Industrial Organization (Englewood Cliffs, NJ: Prentice-Hall, 1979), p.301

Ibid., Chapter 15.

By assumption they could not be because if they were, no manager would seek to merge. At least this is the reasoning advanced by many orthodox financial economists.

Richardson G.B. , Information and Investment (Oxford: Oxford University Press, 1960), p.31.

Koopmans T. , Three Essays on the State of Economic Science (New York, NY: McGraw-Hill, 1957), p.146.

Koopmans (Ibid., p.147) goes on to point out that because of this deficiency economic theorists are not able to speak with anything approaching scientific authority on matters relating to individual versus collective enterprise.

Ibid., p.163.

If the R&D is industry specific and all firms in the industry participate in funding, the appropriability problem will be substantially solved, particularly if a coordinated manufacturing program is also put in place.

Davis D. , “R&D Consortia,” High Technology (October 1985), p. 42.

See Teece D. J. , “Profiting from Technological Innovation,” Research Policy (December 1986).

According to William Norris, U.S. corporations were not willing to give collaborative research a try until “these companies had the hell scared out of them by the Japanese” ( Davis , op. cit., p.42).

Ouchi W. , M-Form Society (New York, NY: Avon Books, 1984), p. 103.

Ibid., p.105.

A Japanese government laboratory was also involved.

Set at $2 million a year for the Center, and an additional $12 million a year for participation in the associated laboratory work. By mid-1988, 55 companies had joined the Center (including three American companies: IBM, Dupont, and Rockwell), while 45 companies had agreed to participate in the laboratory activities as well. These members are invited to send one or two qualified researchers to the laboratory.

See Meade J.E. , The Theory of Indicative Planning (Manchester: Manchester University Press, 1970); and Cohen Stephen , Modern Capitalist Planning: The French Model (Berkeley, CA: University of California Press, 1969).

Chandler A. , The Visible Hand (Cambridge, MA: Harvard University Press, 1977), Chapter 1. Note, however, that Chandler was by no means the first to make the observation that administrative allocation inside the firm constituted a form of planning. Karl Marx was quite willing to credit the market with having introduced rational, scientific planning on a partial basis. However chaotic Marx thought competitive coordination processes between functions were, within the factory productive activity was seen as deliberately coordinated according to a plan conceived by the capitalist. See Marx Karl , Capital, Vol. 1 (New York, NY: International [1867], 1967), p.356.

Williamson O.E. , Economic Institutions of Capitalism. (New York, NY: Free Press, 1985).

If the common goal was price fixing, or naked market share decisions without any efficiency effects, such an agreement would constitute a cartel, and not an alliance.

For a review and compendium of industry studies, see Mowery David , ed., International Collaborative Ventures in U.S. Manufacturing (Cambridge, MA: Ballinger, 1988).

15 U.S.C. 4302.

See Wright , “The National Cooperative Research Act of 1984: A New Antitrust Regime for Joint Research and Development Ventures,” High Technology Law Journal, 1 (1986), p.178. “The NCRA has, to a large extent, merely codified existing antitrust doctrine. This codification by itself is unlikely to have a significant effect on the nation's R&D output, which has prompted some to criticize the Act as unnecessary … [I]t is questionable how much uncertainty has actually be removed by the Act.”

U.S.C. 4305(a)-(b).

15 U.S.C. 4303(a). The Act also allows prevailing defendants to recover attorney's fees, but only “if the claim, or the claimant's conduct during the litigation of the claim, was frivolous, unreasonable, without foundation, or in bad faith.” 15 U.S.C. 4304(a)(2).

Comments of D. Bruce Marrifield, Assistant Secretary of Commerce for Productivity, Technology, and Innovation, January 1988.

This section and the next are based on Jorde T.M. Teece D.J. , “Innovation, Cooperation, and Antitrust,” Working Paper no. BPP-37, Center for Research in Management, University of California at Berkeley, October 1988 (forthcoming, High Technology Law Journal, All, 1989).

Jorde T.M. Teece D.J. have crafted such a proposal which, after some modifications, was introduced into Congress in February 1989 by Campbell Tom (R-CA) and Richard Boucher (D-VA) as the “National Cooperative Innovation and Commercialization Act of 1989,” H.R. 1024.