Multi-task Research and Research Joint Ventures

The paper shows that, whenever the completion of a research project requires the overcoming ofmore than oneresearch obstacle, then Research Joint Ventures enjoy an intrinsic advantage relative to independent firms. This advantage, which has hitherto escaped attention in the RJV literature, relates to the RJV’s ability toorganizeresearch more efficiently than independent firms. The fact that RJVs can be both more profitable and yield higher expected net welfare than independent firms is surprising because it is derived from a model in which RJVs donotoptimize over R&D investment. The paper exploits a basic result in systems reliability theory to establish the organizational superiority of RJVs.