Innovation Strategies in a Competitive Dynamic Setting
AbstractThis paper presents a dynamic model of a competitive R&D and production duopoly subject to knowledge spillovers. Two asymmetric firms operate for a limited period of time and dispose their knowledge capital in the end. Both firms and the social planner prefer the R&D-cooperative strategy over the competitive one regardless of the intensity of knowledge spillovers. Accumulation of knowledge capital results allows the monopolist to have lower marginal cost of production and charge a lower market price than a fully competitive duopoly. Being able to define the degree of knowledge exchange when creating a research joint venture, the firms do not necessary choose the highest degree of cooperation available.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1395.
Date of creation: 2005
Date of revision:
innovation; R&D; spillovers; cooperation;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-20 (All new papers)
- NEP-COM-2005-02-20 (Industrial Competition)
- NEP-GTH-2005-02-20 (Game Theory)
- NEP-INO-2005-02-20 (Innovation)
- NEP-MIC-2005-02-20 (Microeconomics)
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