Open Innovation in a dynamic Cournot duopoly

Irina Hasnas, Luca Lambertini () and Arsen Palestini ()

Economic Modelling, 2014, vol. 36, issue C, 79-87

Abstract: In recent years Open Innovation (OI) processes have been receiving growing attention from the empirical and theoretical economic literature, where a debate is taking place on the aspects of complementarity or substitutability between internal R&D and OI spillover. By means of a differential game approach, we analyze the case of substitutability in an OI setup in a Cournot duopoly where knowledge spillovers are endogenously determined via the R&D process. The game produces multiple steady states, allowing for an asymmetric solution where a firm may trade off the R&D investment against information absorption from the rival. The technical analysis and the numerical simulations point out that the firm which commits to a higher level of OI absorption produces a smaller output and enjoys higher profits than its rival.

Keywords: R&D; Spillovers; Dynamic games (search for similar items in EconPapers)
JEL-codes: C73 L13 O31 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Open Innovation in a Dynamic Cournot Duopoly (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:36:y:2014:i:c:p:79-87

DOI: 10.1016/j.econmod.2013.09.020

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