EconPapers    
Economics at your fingertips  
 

Market Competition, R&D and Firm Profits in Asymmetric Oligopoly

Junichiro Ishida, Toshihiro Matsumura and Noriaki Matsushima

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: We investigate a Cournot model with strategic R&D investments wherein efficient low-cost firms compete against less efficient high-cost firms. We find that an increase in the number of high-cost firms can stimulate R&D by the low-cost firms, while it always reduces R&D by the high-cost firms. More importantly, this force can be strong enough to compensate for the loss that arises from more intense market competition: the low-cost firms' profits may indeed increase with the number of high-cost firms. An implication of this result is far-reaching, as it gives low-cost firms an incentive to help, rather than harm, high-cost competitors. We relate this implication to a practice known as open knowledge disclosure, especially Ford's strategy of disclosing its know-how publicly and extensively at the beginning of the 20th century.

Date: 2010-05
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2010/DP0777.pdf

Related works:
Journal Article: MARKET COMPETITION, R&D AND FIRM PROFITS IN ASYMMETRIC OLIGOPOLY (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:0777

Access Statistics for this paper

More papers in ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka Contact information at EDIRC.
Bibliographic data for series maintained by Librarian ().

 
Page updated 2025-06-09
Handle: RePEc:dpr:wpaper:0777