2 J. L. Econ. & Org. 315 (1986)
Research Joint Ventures: An Antitrust Analysis

handle is hein.journals/jleo2 and id is 323 raw text is: Research Joint Ventures: An Antitrust Analysis
GENE M. GROSSMAN
Woodrow Wilson School, Princeton University
CARL SHAPIRO
Woodrow Wilson School, Princeton University
1. INTRODUCTION
The long-run vitality of the United States economy requires a vigorous and
ongoing research and development effort. In many of the dynamic, high-
growth industries, continuous innovation is necessary for competitive suc-
cess. Some foreign governments already have targeted their entrants in these
industries with various tools of public support, including several that are
intended to encourage R&D directly or indirectly. For the United States to
maintain a viable competitive position in the information-intensive sector, our
public policy regarding R&D activities must be coherent and economically
sensible.
A key element of U.S. policy affecting R&D is the antitrust treatment of
research joint ventures (RJVs). Substantial evidence exists to suggest that
antitrust uncertainties have discouraged U.S. firms from entering into coop-
erative R&D projects.' Attempting to correct this problem, Congress passed
We are happy to acknowledge research support from the Federal Trade Commission, the
National Science Foundation under Grant No. SES-8408622, and the National Bureau of Eco-
nomic Research. Howard Chang provided outstanding research assistance. Discussions with
Michael Katz, Janusz Ordover, and Robert Willig have improved our understanding of research
joint ventures. Oliver Williamson and an anonymous referee were of great help to us in improving
the paper.
1. The Senate Judiciary Committee noted in its 1984 investigation (see U.S. Code Congres-
sional and Administrative News, Legislative Histories, 4: 3106) that antitrust challenges have
been frequently cited by industry to explain the reluctance to undertake such activity. The
Journal of Law, Economics, and Organization vol. 2, no. 2 Fall 1986
 1986 by Yale University. All rights reserved. ISSN 8756-6222

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