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One Lab, Two Firms, Many Possibilities: on R&D outsourcing in the biopharmaceutical industry

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Figure

Figure 1:vequilibrium (pointthe lab to appropriate a positive benefit, that is is superadditive (ǫ ≥ 0), so the loci for v ({1}) and v ({2}) intersect inside the simplex
Figure 2:vR&D equilibrium (pointagreeing horizontally to coordinate R&D outsourcing, the firms fully reappropriate industry profits (pointfirm integrate vertically with the lab, at no cost, it would increase profits (point is strictly subadditive (ǫ < 0), so t

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