Open Innovation in a dynamic Cournot duopoly

Arbeitspapier

In recent years Open Innovation (OI) processes have been receiving growing attention from the empirical and theoretical economic literature, where a debate is taking place on the aspects of complementarity or substitutability between internal R&D and OI spillover. By means of a differential game approach, we analyze the case of substitutability in an OI setup in a Cournot duopoly where knowledge spillovers are endogenously determined via the R&D process. The game produces multiple steady states, allowing for an asymmetric solution where a firm may trade off the R&D investment against information absorption from the rival. The technical analysis and the numerical simulations point out that the firm which commits to a higher level of OI absorption produces a smaller output and enjoys higher profits than its rival.

Object Details

• ISBN: 978-3-86304-110-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 111

Classification and Topics

• Classification: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Oligopoly and Other Imperfect Markets ; Innovation and Invention: Processes and Incentives
• Subject: R&D ; spillovers ; dynamic games

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hasnas, Irina ; Lambertini, Luca ; Palestini, Arsen
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/83954
• Last update: 10.03.2025, 11:42 AM CET