R&D and Production Behavior of Asymmetric Duopoly Subject to Knowledge Spillovers
AbstractWe construct an asymmetri c 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 welfare-maximizing 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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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 287.
Date of creation: 2000
Date of revision:
Innovation; R&D; spillovers; cooperation;
Other versions of this item:
- Lukach R. & Plasmans J., 2000. "R&D and production behaviour of asymmetric duopoly subject to knowledge spillovers," Working Papers 2000005, University of Antwerp, Faculty of Applied Economics.
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