IDEAS home Printed from https://ideas.repec.org/a/vrs/ijomae/v46y2015i1p134-146n6.html
   My bibliography  Save this article

R&D Activities in Oligopoly and Social Welfare

Author

Listed:
  • Prokop Jacek

    () (Department of Economics II, Warsaw School of Economics, Poland)

  • Wiśnicki Bartłomiej

    () (Warsaw School of Economics, Poland)

Abstract

This paper analyzes the impact of R&D activities in an oligopoly on consumer surplus and social welfare. We use a two-stage model to analyze the behavior of duopolists at the research level, and in the final-product market, under the assumption of linear and quadratic cost functions. Three options for firm competition are considered: 1) Cournot competition at both stages; 2) cooperation at the R&D stage and Cournot competition in the final-product market; and 3) cooperation at both stages. Numerical simulations for various levels of R&D spillovers are conducted to analyze the welfare effects of firm decisions. We conclude that for high levels of technological spillovers, total welfare is highest when firms engage in cooperation at the R&D stage, and compete in the final product market, independent of the shape of cost functions. However, the functional form of production costs has a qualitative impact on welfare when firms fully compete.

Suggested Citation

  • Prokop Jacek & Wiśnicki Bartłomiej, 2015. "R&D Activities in Oligopoly and Social Welfare," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 46(1), pages 134-146, June.
    • Handle: RePEc:vrs:ijomae:v:46:y:2015:i:1:p:134-146:n:6
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/ijme.2015.46.issue-1/ijme-2015-0025/ijme-2015-0025.xml?format=INT
    Download Restriction: no

    References listed on IDEAS

    as
    1. De Fraja, Gianni & Silipo, Damiano Bruno, 2002. "Product market competition, R&D, and welfare," Research in Economics, Elsevier, vol. 56(4), pages 381-397, December.
    2. Nicholas Bloom & Mark Schankerman & John Van Reenen, 2013. "Identifying Technology Spillovers and Product Market Rivalry," Econometrica, Econometric Society, vol. 81(4), pages 1347-1393, July.
    3. Prokop, Jacek & Karbowski, Adam, 2013. "R&D cooperation and industry cartelization," Economics Discussion Papers 2013-41, Kiel Institute for the World Economy (IfW).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karbowski, Adam & Kryśkiewicz, Łukasz & Prokop, Jacek, 2018. "Kartele jako przedmiot polityki gospodarczej [Cartels in Public Policy Perspective]," MPRA Paper 90364, University Library of Munich, Germany, revised 2018.
    2. Adam Karbowski & Jacek Prokop, 2018. "R&D activities of enterprises, product market leadership, and collusion," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 36(2), pages 735-753.
    3. Karbowski, Adam & Prokop, Jacek, 2016. "Wybrane zagadnienia współpracy badawczo-rozwojowej przedsiębiorstw w ujęciu ekonomii gałęziowej [Selected problems of interfirm R&D cooperation in the industrial organization literature]," MPRA Paper 72784, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:ijomae:v:46:y:2015:i:1:p:134-146:n:6. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: http://kolegia.sgh.waw.pl/en/KGS/Pages/default.aspx .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.