R&D returns, market structure and research joint ventures
Research output: Contribution to journal › Journal article › Research › peer-review
A two-period symmetric Cournot duopoly with linear demand and costs is analyzed under linear (or more general) returns to scale in process R&D. Subgame-perfect equilibrium may call for one firm to fully innovate while the other firm remains just as before. The outcome is a polar duopoly or monopoly (one firm endogenously exiting). Two research joint venture schemes and the noncooperative solution are compared. Due to built-in symmetry, a joint lab does not always lead to the best performance. Overall, our findings differ quite substantially from those based on strongly decreasing R&D returns and symmetric outcomes
Original language | English |
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Journal | Journal of Institutional and Theoretical Economics |
Volume | 156 |
Issue number | 4 |
Pages (from-to) | 583-598 |
ISSN | 0932-4569 |
Publication status | Published - 2000 |
ID: 148643