Multi-market competition, R&D, and welfare in oligopoly
AbstractWe investigate a multi-market Cournot model with strategic process R&D investments wherein a multi-market monopolist meets entrants that enter one of the markets. We find that entry can enhance the total R&D expenditure of the incumbent firm. That is, entry can stimulate R&D effort. Moreover, the incumbent's profit nonmonotonically changes as the number of entrants increases. Depending on the fixed entry costs and R&D technologies, both insufficient and excess entrycan appear.
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Bibliographic InfoPaper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0796.
Date of creation: Oct 2010
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-COM-2010-10-16 (Industrial Competition)
- NEP-CSE-2010-10-16 (Economics of Strategic Management)
- NEP-INO-2010-10-16 (Innovation)
- NEP-TID-2010-10-16 (Technology & Industrial Dynamics)
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- Masahiro Okuno-Fujiwara & Kotaro Suzumura, 1991.
"Symmetric Cournot Oligopoly and Economic Welfare: A Synthesis,"
Discussion Paper Series
a242, Institute of Economic Research, Hitotsubashi University.
- Okuno-Fujiwara, Masahiro & Suzumura, Kotaro, 1993. "Symmetric Cournot Oligopoly and Economic Welfare: A Synthesis," Economic Theory, Springer, vol. 3(1), pages 43-59, January.
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