Tesoriere, Antonio
In a linear model ofcost reducing R&D/Cournot competition, firm asymmetry is shown to be sustainable as subgame perfect Nash equilibrium with R&D competition only ifthe productivity of research is sufficiently large relative to the benefits from imitation. In such a case, industry-wide cost reduction and firms asymmetry are increasing and decreasing functions of the spillover rate, respectively. In the absence of spillovers, a symmetric joint lab generates higher consumer surplus and social welfare than a pair ofasymmetric competitors. If spillovers are not too small, asymmetric R&D competition is advantageous to
consumers, but not to firms.
Bibliographic reference |
Tesoriere, Antonio. Endogenous firm asymmetry and cooperative R&D in linear duopoly with spillovers. CORE Discussion Papers ; 2005/86 (2005) |
Permanent URL |
http://hdl.handle.net/2078.1/4682 |