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Duopoly firms’ decisions on disclosing their R&D investment information

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  • Kyung Hwan Baik

    (Appalachian State University
    Sungkyunkwan University)

  • Sang-Kee Kim

    (Chungbuk National University)

Abstract

We study a quantity-setting duopoly and a price-setting duopoly in which each firm has the option of disclosing or not its cost-reducing R&D investment. Each firm’s R&D outcome (or, its new marginal cost) is deterministically determined, and thus, when making its R&D investment, each firm is certain about its R&D outcome. We consider the following game. In the first stage, each firm decides and announces whether it will disclose its R&D investment. Next, each firm chooses−and discloses if it announced to do so−its R&D investment. Finally, the firms choose their output levels [prices] simultaneously and independently. When choosing its output level [price], each firm knows the other firm’s new marginal cost only if the other firm disclosed its R&D investment. We show in both models that each firm discloses its R&D investment.

Suggested Citation

  • Kyung Hwan Baik & Sang-Kee Kim, 2025. "Duopoly firms’ decisions on disclosing their R&D investment information," Journal of Economics, Springer, vol. 146(2), pages 187-220, October.
    • Handle: RePEc:kap:jeczfn:v:146:y:2025:i:2:d:10.1007_s00712-025-00916-y
    DOI: 10.1007/s00712-025-00916-y
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