Duopoly firms’ decisions on disclosing their R&D investment information

Kyung Baik () and Sang-Kee Kim ()
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Sang-Kee Kim: Chungbuk National University

Journal of Economics, 2025, vol. 146, issue 2, No 3, 187-220

Abstract: Abstract We study a quantity-setting duopoly and a price-setting duopoly in which each firm has the option of disclosing or not its cost-reducing R&D investment. Each firm’s R&D outcome (or, its new marginal cost) is deterministically determined, and thus, when making its R&D investment, each firm is certain about its R&D outcome. We consider the following game. In the first stage, each firm decides and announces whether it will disclose its R&D investment. Next, each firm chooses−and discloses if it announced to do so−its R&D investment. Finally, the firms choose their output levels [prices] simultaneously and independently. When choosing its output level [price], each firm knows the other firm’s new marginal cost only if the other firm disclosed its R&D investment. We show in both models that each firm discloses its R&D investment.

Keywords: Decision on disclosing an R&D investment; Cost-reducing R&D investment; Deterministic R&D process; Disclosure of R&D investments; Information sharing; D43; L13; C72 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:146:y:2025:i:2:d:10.1007_s00712-025-00916-y

DOI: 10.1007/s00712-025-00916-y

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