R&D and production behavior of asymmetric duopoly subject to knowledge spillover

Ruslan Lukatch and Joseph Plasmans ()

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: We construct an asymmetric duopolistic R&D and production behavior model subject to knowledge spillovers. This model is an extension to the symmetric model of d’Aspremont and Jacquemin (A&J (1988)) and aims to determine the cooperative and non-cooperative R&D strategies for two agents of different size. The paper concludes that the introduction of asymmetry into the A&J (1988) model leads to different R&D expenditures and production decisions made by the firms. Simulations show that the bigger agent has larger R&D expenditures and higher output. If firms choose the monopoly collusion or the welfaremaximizing strategy, the optimal solution implies that R&D is conducted asymmetrically by both agents, but that production is conducted only by the largest agent.

Keywords: Innovation; R&D; Spillovers; Cooperation (search for similar items in EconPapers)
JEL-codes: C72 D21 O31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2000-03
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: R&D and Production Behavior of Asymmetric Duopoly Subject to Knowledge Spillovers (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2000005

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