Cost reducing incentives in a mixed duopoly market

Hikaru Ogawa and Ming Hsin Lin

Economics Bulletin, 2005, vol. 12, issue 6, 1-6

Abstract: This note studies the cost-reducing incentives in a mixed duopoly market. The result shows that while a profit-maximizing private firm carries out the cost-reducing investment, a social welfare-maximizing firm does not have an incentive to reduce its costs as long as the market share of the private firm is sufficiently large.

Keywords: cost-reducing; innovation (search for similar items in EconPapers)
JEL-codes: L1 L3 (search for similar items in EconPapers)
Date: 2005-01-26
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Citations: View citations in EconPapers (18)

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