TY  - GEN
AB  - 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 prod-
uct 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 of complements)
and lower profits, compared to the corresponding standard capital accu-
mulation game. This anticipation effect is stronger in the case of R&D
cooperation. Furthermore, since due to R&D cooperation firms introduce
the new product at the same time, this leads to intensified competition
and lower firm profits right after the new product has been introduced. In
addition, we show that under R&D competition the firm that innovates
first, overshoots in new-product capacity buildup in order to exploit its
temporary monopoly position. Taking into account all these effects, the
result is that, if the new product is neither a close substitute nor a strong
complement of the established product, positive synergy effects in R&D
cooperation are necessary to make it more profitable for firms than R&D
competition.
DA  - 2013
DO  - 10.4119/unibi/2915393
LA  - eng
PY  - 2013
SN  - 2196-2723
SP  - 24-
TI  - R&D Competition versus R&D Cooperation in Oligopolistic Markets with Evolving Structure
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29153937
Y2  - 2024-11-24T00:15:09
ER  -