Abstract
This paper develops a model to analyze behavior and welfare effects of a research and production joint venture (JV). In the model, a research dollar is more productive if spent in the joint venture because it increases the achievable probability of new product introduction. This efficiency of research and production joint ventures offsets, to some degree, the loss due to higher consumer prices. For some parameter configurations and joint venture membership rules, research and production joint ventures yield higher social welfare than research-only joint ventures (RJVs). This contrasts with some of the industrial organization literature on research collaboration and with traditional antitrust views.