Artikel
Product competition and R&D investment under spillovers within full or partial collusion games
The paper investigates firms' behavior and outcomes (levels of cost-reducing R&D, output, profit and welfare in equilibrium) in a differentiated duopoly with process innovation. One of the important features in this paper is that spillovers operate in the R&D stage and are tied to the degree of product substitutability as well as the extent of technological proximity/alienation of the research paths leading to cost reduction. Using this feature, the paper tries to explore and compare four separate organization setups (Full Competition, Semi-collusion in Production, Semi-collusion in R&D and Full Collusion). It is found that under technological proximity, competitions at the upstream stage depress R&D investment, and firms colluding in R&D regardless of their production strategy always yield more profit and generate higher social welfare than firms colluding in output; under technological alienation, R&D cooperation may reduce firms' interest to invest in R&D, and it is possible that firms in the Full Collusion regime produce most and generate the highest level of social welfare.
- Language
-
Englisch
- Bibliographic citation
-
Journal: Latin American Economic Review ; ISSN: 2196-436X ; Volume: 24 ; Year: 2015 ; Issue: 1 ; Pages: 1-27 ; Heidelberg: Springer
- Classification
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Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Oligopoly and Other Imperfect Markets
Innovation and Invention: Processes and Incentives
- Subject
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R&D
Spillover
Semi-collusion
Product differentiation
Horizontal merger
- Event
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Geistige Schöpfung
- (who)
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Zhao, Kai
- Event
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Veröffentlichung
- (who)
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Springer
- (where)
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Heidelberg
- (when)
-
2015
- DOI
-
doi:10.1007/s40503-015-0018-6
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Zhao, Kai
- Springer
Time of origin
- 2015
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