Product market competition and R&D rivalry

Ping LIN

doi:10.1016/S0165-1765(97)00176-6

Product market competition and R&D rivalry

Ping LIN

Department of Economics

Research output: Journal Publications › Journal Article (refereed) › peer-review

1 Citation (Scopus)

Abstract

This paper analyzes the impact of a future RandD race on current firm behavior in the product market. It is shown that, in order to “soften” rivals in the future RandD race, firms behave less aggressively in the pre-innovation product market than in the standard duopoly models. As a result, the RandD rates are lower than what firms would choose if standard duopoly outcomes are assumed. RandD cooperation is shown to be capable of restoring the duopoly outcome.

Original language	English
Pages (from-to)	105-111
Number of pages	7
Journal	Economics Letters
Volume	58
Issue number	1
DOIs	https://doi.org/10.1016/S0165-1765(97)00176-6
Publication status	Published - 1 Jan 1998

Keywords

R and D rivalry
product market competition

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10.1016/S0165-1765(97)00176-6

Cite this

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abstract = "This paper analyzes the impact of a future RandD race on current firm behavior in the product market. It is shown that, in order to “soften” rivals in the future RandD race, firms behave less aggressively in the pre-innovation product market than in the standard duopoly models. As a result, the RandD rates are lower than what firms would choose if standard duopoly outcomes are assumed. RandD cooperation is shown to be capable of restoring the duopoly outcome.",

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AB - This paper analyzes the impact of a future RandD race on current firm behavior in the product market. It is shown that, in order to “soften” rivals in the future RandD race, firms behave less aggressively in the pre-innovation product market than in the standard duopoly models. As a result, the RandD rates are lower than what firms would choose if standard duopoly outcomes are assumed. RandD cooperation is shown to be capable of restoring the duopoly outcome.

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KW - product market competition

UR - http://commons.ln.edu.hk/sw_master/7178

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DO - 10.1016/S0165-1765(97)00176-6

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Product market competition and R&D rivalry

Abstract

Keywords

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