a Differential R & D Duopoly Game

John Hartwick

No 857, Working Paper from Economics Department, Queen's University

Abstract: At each date, the two players play an R & D investment game "followed" by a Cournot quantity setting game. Each player's R & D augments the common stock of technical knowledge and lowers goods production costs for each player. Profit gross of R & D investment expenditures are quadratic in the state (knowledge here) for each player. R & D investment costs are assumed quadratic in each player's investment. The Nash feedback and Nash open-loop solutions differ in general with the feedback solution being "more competitive", i.e., yielding lower production costs in the steady state.

Pages: 16 pages
Date: 1992-07
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http://qed.econ.queensu.ca/working_papers/papers/qed_wp_857.pdf First version 1992 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:857

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