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R&D and production behavior of asymmetric duopoly subject to knowledge spillover

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  • LUKATCH, Ruslan
  • PLASMANS, Joseph

Abstract

We construct an asymmetric duopolistic R&D and production behavior model subject to knowledge spillovers. This model is an extension to the symmetric model of d’Aspremont and Jacquemin (A&J (1988)) and aims to determine the cooperative and non-cooperative R&D strategies for two agents of different size. The paper concludes that the introduction of asymmetry into the A&J (1988) model leads to different R&D expenditures and production decisions made by the firms. Simulations show that the bigger agent has larger R&D expenditures and higher output. If firms choose the monopoly collusion or the welfaremaximizing strategy, the optimal solution implies that R&D is conducted asymmetrically by both agents, but that production is conducted only by the largest agent.

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File URL: https://www.uantwerpen.be/images/uantwerpen/container1244/files/TEW%20-%20Onderzoek/Working%20Papers/RPS/2000/RPS-2000-005.pdf
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Bibliographic Info

Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2000005.

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Length: 42 pages
Date of creation: Mar 2000
Date of revision:
Handle: RePEc:ant:wpaper:2000005

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Postal: Prinsstraat 13, B-2000 Antwerpen
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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Related research

Keywords: Innovation; R&D; Spillovers; Cooperation;

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References

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  1. Leahy, Dermot & Neary, J Peter, 1997. "R&D Spillovers and the Case for Industrial Policy in an Open Economy," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1671, C.E.P.R. Discussion Papers.
  2. Suzumura, Kotaro, 1992. "Cooperative and Noncooperative R&D in an Oligopoly with Spillovers," American Economic Review, American Economic Association, American Economic Association, vol. 82(5), pages 1307-20, December.
  3. Petit, Maria Luisa & Tolwinski, Boleslaw, 1999. "R&D cooperation or competition?," European Economic Review, Elsevier, Elsevier, vol. 43(1), pages 185-208, January.
  4. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, American Economic Association, vol. 78(5), pages 1133-37, December.
  5. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, American Economic Association, vol. 82(5), pages 1293-306, December.
  6. W. Salant, Stephen & Shaffer, Greg, 1998. "Optimal asymmetric strategies in research joint ventures," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 16(2), pages 195-208, March.
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Cited by:
  1. Joseph Plasmans & Ruslan Lukach, 2010. "The Patterns of Inter-firm and Inter-industry Knowledge Flows in the Netherlands," CESifo Working Paper Series, CESifo Group Munich 3057, CESifo Group Munich.

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