Effets de diffusion et incitations à la R&D sur des marchés homogènes

David Sevy

Annals of Economics and Statistics, 1994, issue 35, 183-216

Abstract: This article deals with the regulation of competition on homogeneous markets, featuring firms that select cost-reducing R&D investments and then prices. In the free competition case, the equilibrium market structure is a monopoly with its traditional inefficiences, which are nevertheless alleviated by the existence of spillovers and their impact on the effectiveness of potential competition. Rather than setting up a Research Joint Venture for internalization purposes, our solution goes through providing guidelines for the determination of prices. Indeed, our regulation involves committing firms to use simple pricing schemes aimed at providing incentives for R&D by rewarding efficiency. This mean of regulation proves relevant for low or high levels of spillovers whereas average levels trigger an intense potential competition that may induce in itself socially desirable behaviors.

Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:1994:i:35:p:183-216

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