R&D Competition versus R&D Cooperation in Oligopolistic Markets with Evolving Structure

@inproceedings{Kopel2013RDCV,
  title={R&D Competition versus R&D Cooperation in Oligopolistic Markets with Evolving Structure},
  author={Michael Kopel and Peter M. Kort},
  year={2013}
}
This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to realize a product innovation. Production capacities of both firms are product specific. It is shown that firms anticipate a future product innovation by under-investing (if the new product is a substitute to the established product) and higher profits, and over-investing (in case… CONTINUE READING
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