R&D Incentives and Market Structure: A Dynamic Analysis
We investigate dynamic R&D for process innovation in an oligopoly where firms invest in cost-reducing activities. We focus on the relationship between R&D intensity and market structure, proving that the industry R&D investment monotonically increases in the number of firms. This Arrowian result contradicts the established wisdom acquired from static games on the same topic.
|Date of creation:||2004|
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- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Cellini, Roberto & Lambertini, Luca, 2002. "A differential game approach to investment in product differentiation," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 51-62, November.
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CORE Discussion Papers RP
823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Cellini, Roberto & Lambertini, Luca, 2009.
"Dynamic R&D with spillovers: Competition vs cooperation,"
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Elsevier, vol. 33(3), pages 568-582, March.
- R. Cellini & L. Lambertini, 2003. "Dynamic R&D with Spillovers: Competition vs Cooperation," Working Papers 495, Dipartimento Scienze Economiche, Universita' di Bologna.
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