6533b7d9fe1ef96bd126d345
RESEARCH PRODUCT
Endogenous firm asymmetry and cooperative R&D in linear duopoly with spillovers
Antonio Tesorieresubject
jel:C72jel:L13jel:O32endogenous asymmetry Cournot instability R&D cooperationdescription
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 toconsumers, but not to firms.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2005-12-01 |