Effects of partial passive ownership in a successive endogenous timing game with R&D spillovers

Lili Xu, Yidan Zhang and Sang‐Ho Lee

Bulletin of Economic Research, 2024, vol. 76, issue 1, 283-297

Abstract: This study explores the effect of partial passive ownership (PPO) in a successive two‐round endogenous timing game wherein firms choose research and development (R&D) investments in the first round and then subsequently choose quantities in the second round. We show that each firm prefers to be a quantity leader independent of the timing of R&D decisions, but the welfare‐inferior Cournot competition is an equilibrium of an endogenous production timing game. Moreover, we discover that the equilibrium of an endogenous R&D timing game crucially depends on the PPO level and R&D spillovers rate, while the R&D timing coordination may not be socially desirable unless both are low or high. Our findings suggest that the R&D leadership position of a PPO holder can play an anticompetitive role in the coordination of R&D competition with higher R&D spillovers rates and PPO levels.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/boer.12425

Related works:
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:bla:buecrs:v:76:y:2024:i:1:p:283-297

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0307-3378

Access Statistics for this article

More articles in Bulletin of Economic Research from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().