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Strategic product R&D investment policy under international rivalry in the presence of demand spillover effects

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  • Tsuyoshi Toshimitsu

    () (School of Economics, Kwansei Gakuin University)

Abstract

This paper first presents the optimal conditions for strategic R&D investment policy in the cases of noncooperative and cooperative R&D investment policies with international rivalry. Then we deal with a model of strategic product (i.e., quality-improving) R&D investment competition. In particular, we analyze an optimal R&D investment policy with regard to the two cases in the presence of demand spillover effects associated with improving the quality of a product. We show how optimality depends on the strength of demand spillover effects. We also consider the same problems assuming heterogeneous consumers and alternative utility functions.

Suggested Citation

  • Tsuyoshi Toshimitsu, 2012. "Strategic product R&D investment policy under international rivalry in the presence of demand spillover effects," Discussion Paper Series 95, School of Economics, Kwansei Gakuin University, revised Sep 2012.
  • Handle: RePEc:kgu:wpaper:95
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    Cited by:

    1. Taba Yumiko, 2016. "Optimal Product R&D Policies with Endogenous Quality Choices and Unilateral Spillover," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 365-391, January.

    More about this item

    Keywords

    strategic R&D investment policy; quality choice; international rivalry; demand spillover effects;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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