Open Innovation in a dynamic cournot duopoly
AbstractIn recent years Open Innovation (OI) processes have been receiving growing attention from the empirical and theoretical economic literature, where a debate is taking place on the aspects of complementarity or substitutability between internal R&D and OI spillover. By means of a differential game approach, we analyze the case of substitutability in an OI setup in a Cournot duopoly where knowledge spillovers are endogenously determined via the R&D process. The game produces multiple steady states, allowing for an asymmetric solution where a firm may trade off the R&D investment against information absorption from the rival. The technical analysis and the numerical simulations point out that the firm which commits to a higher level of OI absorption produces a smaller output and enjoys higher profits than its rival. --
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Bibliographic InfoPaper provided by Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 111.
Date of creation: 2013
Date of revision:
R&D; spillovers; dynamic games;
Other versions of this item:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-25 (All new papers)
- NEP-BEC-2013-10-25 (Business Economics)
- NEP-COM-2013-10-25 (Industrial Competition)
- NEP-IND-2013-10-25 (Industrial Organization)
- NEP-INO-2013-10-25 (Innovation)
- NEP-IPR-2013-10-25 (Intellectual Property Rights)
- NEP-KNM-2013-10-25 (Knowledge Management & Knowledge Economy)
- NEP-SBM-2013-10-25 (Small Business Management)
- NEP-TID-2013-10-25 (Technology & Industrial Dynamics)
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