Spillovers, disclosure lags, and incentives to innovate. Do oligopolies over-invest in R&D?
We develop a dynamic duopoly, where .rms have to take into account a technological externality, that reduces over time their innovation costs, and an inter-.rm spillover, that lowers only the second comer.s R&D cost. This spillover exerts its e¤ect after a disclosure lag. We identify three possible equilibria, which are classi.ed, according to the timing of R&D investments, as early, intermediate, and late. The intermedi- ate equilibrium is subgame perfect for a wide parameters range. When the innovation size is large, it implies that the duopolistic market equi- librium involves underinvestment. Hence, even in presence of a mod- erate degree of inter-.rms spillover, the competitive equilibrium calls for public policies aimed at increasing the research activity. When we focus on minor innovations .the case in which, according to the ear- lier literature, the market equilibrium underinvests .our results imply that the policies aimed at stimulating R&D have to be less sizeable than suggested before, despite the presence of an inter-.rm spillover.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: viale Marconi 5, 24044 Dalmine|
Web page: http://www.unibg.it/struttura/en_struttura.asp?cerca=en_dige_intro
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Denicolo, Vincenzo, 1996. "Patent Races and Optimal Patent Breadth and Length," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 249-65, September.
- Hoppe, Heidrun C. & Lehmann-Grube, Ulrich, 2005. "Innovation timing games: a general framework with applications," Journal of Economic Theory, Elsevier, vol. 121(1), pages 30-50, March.
- F. Delbono & V. Denicolo, 1988.
"Incentives to Innovate in a Cournot Oligopoly,"
44, Dipartimento Scienze Economiche, Universita' di Bologna.
- Dasgupta, Partha, 1988. "Patents, Priority and Imitation or, the Economics of Races and Waiting Games," Economic Journal, Royal Economic Society, vol. 98(389), pages 66-80, March.
- Mansfield, Edwin, 1985. "How Rapidly Does New Industrial Technology Leak Out?," Journal of Industrial Economics, Wiley Blackwell, vol. 34(2), pages 217-23, December.
- Hoppe, Heidrun C, 2002. "The Timing of New Technology Adoption: Theoretical Models and Empirical Evidence," Manchester School, University of Manchester, vol. 70(1), pages 56-76, January.
- Hoppe, Heidrun C., 2000. "Second-mover advantages in the strategic adoption of new technology under uncertainty," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 315-338, February.
- Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
- Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 395-410.
- Jim Y. Jin & Michael Troege, 2006. "R&D Competition And Endogenous Spillovers," Manchester School, University of Manchester, vol. 74(1), pages 40-51, 01.
- Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, Oxford University Press, vol. 94(2), pages 429-436.
- Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-18, December.
- Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 383-401.
- Jennifer F. Reinganum, 1981. "On the Diffusion of New Technology: A Game Theoretic Approach," Review of Economic Studies, Oxford University Press, vol. 48(3), pages 395-405.
- Beath, John & Katsoulacos, Yannis & Ulph, David, 1988.
"Strategic R&D Policy,"
CEPR Discussion Papers
276, C.E.P.R. Discussion Papers.
- Stenbacka, Rune & Tombak, Mihkel M., 1994. "Strategic timing of adoption of new technologies under uncertainty," International Journal of Industrial Organization, Elsevier, vol. 12(3), pages 387-411, September.
- Roberto Hern·n & Pedro L. MarÌn & Georges Siotis, 2003.
"An empirical evaluation of the determinants of Research Joint Venture Formation,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 51(1), pages 75-89, 03.
- Hernán, Roberto & Marín Uribe, Pedro Luis & Siotis, Georges, 2000. "An Empirical Evaluation Of The Determinants Of Research Joint Venture Formation," CEPR Discussion Papers 2442, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:brh:wpaper:0706. 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: (University of Bergamo Library)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.