Multi-market competition, R&D, and welfare in oligopoly

Akio Kawasaki, Ming Hsin Lin and Noriaki Matsushima

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

Abstract: We investigate a multi-market Cournot model with strategic process R&D investments wherein a multi-market monopolist meets entrants that enter one of the markets. We find that entry can enhance the total R&D expenditure of the incumbent firm. That is, entry can stimulate R&D effort. Moreover, the incumbent's profit nonmonotonically changes as the number of entrants increases. Depending on the fixed entry costs and R&D technologies, both insufficient and excess entrycan appear.

Date: 2010-10
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino and nep-tid
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Journal Article: Multi‐Market Competition, R&D, and Welfare in Oligopoly (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:0796

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