Search results for "endogenous asymmetry"
showing 4 items of 4 documents
Endogenous firm asymmetry and cooperative R&D in linear duopoly with spillovers
2005
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.
Competing R&D Joint Ventures in Cournot oligopoly with spillovers
2014
This paper considers competition between R&D cartels, whereby prospective Cournot competitors coordinate their R&D decisions in order to maximize joint profit. It studies how R&D activity, aggregate profit, consumer surplus, and social welfare vary as the number of competing cartels varies. It also compares equilibrium with second best R&D, and discusses the policy implications of the results. The results show that the effects of R&D cartel competition depend on the welfare criterion adopted and on whether there are cooperative synergies or not.
Endogenous asymmetry and cooperative R&D in linear duopoly with spillovers
2009
In a standard model of R&D followed by linear Cournot competition, firm asymmetry is sustainable as equilibrium with non cooperative R&D if and only if the productivity of research is sufficiently large relative to the benefits of imitation. Increasing spillovers distribute R&D results among asymmetric competitors, causing price, firm asymmetry, and joint profit to reduce. With zero spillovers, a symmetric joint lab dominates asymmetric R&D competition in terms of social welfare and consumer surplus, but is sometimes dominated in terms of joint profit. Raising spillovers encourage symmetric collusion but makes the latter potentially harmful to consumers. (JEL : C72; L13; O32).
A Further Note on Endogenous Spillovers in a Non-tournament R&D Duopoly
2008
This note considers the paper of Poyago-Theotoky (1999) on strategic R&D with endogenous spillovers. It proves through an example that, under R&D collusion, optimality sometimes requires either minimal or asymmetric spillovers. It also provides a simple sufficient condition for optimal spillovers between colluding firms to involve maximal spillovers (i.e., complete sharing of information).