R&D Incentives in Vertically Related Markets
This paper focuses on incentives to invest in research and development (R&D) in vertically related markets. In a bilateral duopoly setup, we consider how process R&D incentives of the firms in both upstream and downstream market depend on the intensity of simultaneous interbrand and intrabrand competition. Among the results: both interbrand and intrabrand competition have twofold effects on R&D incentives. Existence of a vertically related market with imperfect competition lowers both the incentives to invest in process R&D and the competitive advantage through the R&D investment. We will show how the impact of a firm's R&D investments in either market on consumer surplus as well as on the profits of all firms in both markets depends on exogenous parameters.
|Date of creation:||2013|
|Date of revision:|
|Publication status:||Forthcoming in|
|Contact details of provider:|| Postal: Universitätsstraße 25, 35037 Marburg|
Web page: http://www.uni-marburg.de/fb02/
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.:
- Yongmin Chen, 2000.
"On Vertical Mergers and Their Competitive Effects,"
Econometric Society World Congress 2000 Contributed Papers
0383, Econometric Society.
- Roman Inderst & Christian Wey, 2001.
"Bargaining, Mergers, and Technology Choice in Bilaterally Oligopolistic Industries,"
CIG Working Papers
FS IV 01-19, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Inderst, Roman & Wey, Christian, 2003. " Bargaining, Mergers, and Technology Choice in Bilaterally Oligopolistic Industries," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 1-19, Spring.
- Inderst, Roman & Wey, Christian, 2001. "Bargaining, Mergers and Technology Choice in Bilaterally Oligopolistic Industries," CEPR Discussion Papers 2981, C.E.P.R. Discussion Papers.
- Elberfeld, Walter, 2002. "Market Size and Vertical Integration: Stigler's Hypothesis Reconsidered," Journal of Industrial Economics, Wiley Blackwell, vol. 50(1), pages 23-42, March.
- Chen, Zhiqi, 2003.
" Dominant Retailers and the Countervailing-Power Hypothesis,"
RAND Journal of Economics,
The RAND Corporation, vol. 34(4), pages 612-25, Winter.
- Zhiqi Chen, 2001. "Dominant Retailers and the Countervailing Power Hypothesis," Carleton Economic Papers 01-05, Carleton University, Department of Economics, revised 2003.
- Gérard Gaudet & Ngo Van Long, 1993.
"Vertical Integration, Foreclosure and Profits in the Presence of Double Marginalisation,"
Cahiers de recherche du Département des sciences économiques, UQAM
9308, Université du Québec à Montréal, Département des sciences économiques.
- Géarard Gaudet & Ngo Long, 1996. "Vertical Integration, Foreclosure, and profits in the Presence of Double Marginalization," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(3), pages 409-432, 09.
- Gérard Gaudet & Ngo Van Long, 1995. "Vertical Integration, Foreclosure and Profits in the Presence of Double Marginalisation," CIRANO Working Papers 95s-40, CIRANO.
- Ordover, Janusz A & Saloner, Garth & Salop, Steven C, 1990. "Equilibrium Vertical Foreclosure," American Economic Review, American Economic Association, vol. 80(1), pages 127-42, March.
- Lin, Ping & Saggi, Kamal, 2002. "Product differentiation, process R&D, and the nature of market competition," European Economic Review, Elsevier, vol. 46(1), pages 201-211, January.
- Laurent Linnemer, 2003. "Backward Integration by a Dominant Firm," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(2), pages 231-259, 06.
- Abiru, Masahiro & Nahata, Babu & Raychaudhuri, Subhashis & Waterson, Michael, 1998.
"Equilibrium structures in vertical oligopoly,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 37(4), pages 463-480, December.
- von Ungern-Sternberg, Thomas, 1996. "Countervailing power revisited," International Journal of Industrial Organization, Elsevier, vol. 14(4), pages 507-519, June.
- O'Donoghue, Ted & Zweimüller, Josef, 1998.
"Patents in a Model of Endogenous Growth,"
56, Institute for Advanced Studies.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
- Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-21, January.
When requesting a correction, please mention this item's handle: RePEc:mar:magkse:201307. 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: (Bernd Hayo)
If references are entirely missing, you can add them using this form.