Product differentiation, process R&D, and the nature of market competition

Ping LIN; Kamal SAGGI

doi:10.1142/9789813233027_0029

Product differentiation, process R&D, and the nature of market competition

Ping LIN^*, Kamal SAGGI

^*Corresponding author for this work

Department of Economics

Research output: Book Chapters | Papers in Conference Proceedings › Book Chapter › Research › peer-review

Abstract

We investigate the relationship between process and product R&D and compare the incentives for both types of R&D under different modes of market competition (Bertrand versus Cournot). It is shown that: (i) process R&D investments increase with the degree of product differentiation and firms invest more in product R&D when they can do process R&D than when they cannot; (ii) Bertrand firms have a stronger incentive for product R&D whereas Cournot firms invest more in process R&D; and (iii) cooperation in product R&D promotes both types of R&D relative to competition whereas cooperation in both types of R&D discourages R&D relative to cooperation in just product R&D.

Original language	English
Title of host publication	Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy
Editors	Kamal SAGGI
Place of Publication	Singapore
Publisher	World Scientific
Chapter	29
Pages	647-657
Number of pages	11
ISBN (Electronic)	9789813233027, 9789813233034
ISBN (Print)	9789813233010
DOIs	https://doi.org/10.1142/9789813233027_0029
Publication status	Published - 2024

Publication series

Name	World Scientific Studies in International Economics
Volume	82
ISSN (Print)	1793-3641

Bibliographical note

This chapter was originally appeared in European Economic Review 46, 201–211.
Publisher Copyright: © 2002 Elsevier Science B.V.

Keywords

Complementarity
Process R&D
Product R&D

Access to Document

10.1142/9789813233027_0029

Cite this

LIN, P., & SAGGI, K. (2024). Product differentiation, process R&D, and the nature of market competition. In K. SAGGI (Ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy (pp. 647-657). (World Scientific Studies in International Economics; Vol. 82). World Scientific. https://doi.org/10.1142/9789813233027_0029

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abstract = "We investigate the relationship between process and product R&D and compare the incentives for both types of R&D under different modes of market competition (Bertrand versus Cournot). It is shown that: (i) process R&D investments increase with the degree of product differentiation and firms invest more in product R&D when they can do process R&D than when they cannot; (ii) Bertrand firms have a stronger incentive for product R&D whereas Cournot firms invest more in process R&D; and (iii) cooperation in product R&D promotes both types of R&D relative to competition whereas cooperation in both types of R&D discourages R&D relative to cooperation in just product R&D.",

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author = "Ping LIN and Kamal SAGGI",

note = "This chapter was originally appeared in European Economic Review 46, 201–211. Publisher Copyright: {\textcopyright} 2002 Elsevier Science B.V.",

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series = "World Scientific Studies in International Economics",

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LIN, P & SAGGI, K 2024, Product differentiation, process R&D, and the nature of market competition. in K SAGGI (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy. World Scientific Studies in International Economics, vol. 82, World Scientific, Singapore, pp. 647-657. https://doi.org/10.1142/9789813233027_0029

Product differentiation, process R&D, and the nature of market competition. / LIN, Ping; SAGGI, Kamal.
Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy. ed. / Kamal SAGGI. Singapore: World Scientific, 2024. p. 647-657 (World Scientific Studies in International Economics; Vol. 82).

Research output: Book Chapters | Papers in Conference Proceedings › Book Chapter › Research › peer-review

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AB - We investigate the relationship between process and product R&D and compare the incentives for both types of R&D under different modes of market competition (Bertrand versus Cournot). It is shown that: (i) process R&D investments increase with the degree of product differentiation and firms invest more in product R&D when they can do process R&D than when they cannot; (ii) Bertrand firms have a stronger incentive for product R&D whereas Cournot firms invest more in process R&D; and (iii) cooperation in product R&D promotes both types of R&D relative to competition whereas cooperation in both types of R&D discourages R&D relative to cooperation in just product R&D.

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LIN P, SAGGI K. Product differentiation, process R&D, and the nature of market competition. In SAGGI K, editor, Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy. Singapore: World Scientific. 2024. p. 647-657. (World Scientific Studies in International Economics). Epub 2023 Sept. doi: 10.1142/9789813233027_0029

Product differentiation, process R&D, and the nature of market competition

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Product differentiation, process R&D, and the nature of market competition

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