A contribution to the theory of R&D investments

Arbeitspapier

This research contributes to the theory of cost-reducing R&D investments by offering a tractable three-stage non-cooperative Cournot duopoly game in which R&D-investing firms choose whether to disclose R&D-related information to the rival. Though in a noncooperative context firms have no incentive to unilaterally disclose information on their costreducing R&D activity to prevent the rival from freely appropriate it, this work shows that there is room for the government to design an optimal policy aimed at incentivising unilaterally each owner towards R&D disclosure. Under this welfare improving policy, sharing R&D-related information becomes a Pareto efficient Nash equilibrium strategy of selfish firms. These findings suggest that introducing public subsidies aimed at favouring R&D disclosure represents a win-win result, eliminating the so far established - and unpleasant for both firms and society - non-disclosing outcome.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: GLO Discussion Paper ; No. 940

Classification and Topics

• Classification: 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: Cost-reducing innovation ; Nash equilibrium ; Government ; Social welfare

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Buccella, Domenico ; Fanti, Luciano ; Gori, Luca
• Event: Veröffentlichung
• (who): Global Labor Organization (GLO)
• (where): Essen
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/242484
• Last update: 10.03.2025, 11:43 AM CET