Innovation Strategies in a Competitive Dynamic Setting

Ruslan Lukach, Joseph Plasmans () and Peter Kort

No 1395, CESifo Working Paper Series from CESifo

Abstract: This paper presents a dynamic model of a competitive R&D and production duopoly subject to knowledge spillovers. Two asymmetric firms operate for a limited period of time and dispose their knowledge capital in the end. Both firms and the social planner prefer the R&D-cooperative strategy over the competitive one regardless of the intensity of knowledge spillovers. Accumulation of knowledge capital results allows the monopolist to have lower marginal cost of production and charge a lower market price than a fully competitive duopoly. Being able to define the degree of knowledge exchange when creating a research joint venture, the firms do not necessary choose the highest degree of cooperation available.

Keywords: innovation; R&D; spillovers; cooperation (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-com, nep-gth, nep-ino and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1395

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