R&D competition and the persistence of technology leadership

Hamid Beladi and Arijit Mukherjee

International Journal of Economic Theory, 2022, vol. 18, issue 3, 272-284

Abstract: We show that whether a technology leader invests more in R&D compared to a technology follower may depend on the R&D process and whether the follower is in the market. Considering Cournot competition, we show that if the firms are in the market, the technology leader (follower) invests more in R&D under a step‐by‐step R&D process (when the firms target similar technologies). However, if the technology follower can enter the market only if it is successful in R&D, the technology follower may invest more (invests more) in R&D under the step‐by‐step R&D process (when the firms target similar technologies). We also show the implications of Bertrand competition.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:bla:ijethy:v:18:y:2022:i:3:p:272-284

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