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Strategic product R&D investment policy under international rivalry in the presence of demand spillover effects

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  • Tsuyoshi Toshimitsu

    ()
    (School of Economics, Kwansei Gakuin University)

Abstract

This paper first presents the optimal conditions for strategic R&D investment policy in the cases of noncooperative and cooperative R&D investment policies with international rivalry. Then we deal with a model of strategic product (i.e., quality-improving) R&D investment competition. In particular, we analyze an optimal R&D investment policy with regard to the two cases in the presence of demand spillover effects associated with improving the quality of a product. We show how optimality depends on the strength of demand spillover effects. We also consider the same problems assuming heterogeneous consumers and alternative utility functions.

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File URL: http://192.218.163.163/RePEc/pdf/kgdp95.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 95.

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Length: 29 pages
Date of creation: Sep 2012
Date of revision: Sep 2012
Handle: RePEc:kgu:wpaper:95

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Keywords: strategic R&D investment policy; quality choice; international rivalry; demand spillover effects;

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