Product Innovation and Transportation Technology in a Cournot Duopoly

Andrea Mantovani

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In this paper I will evaluate the strategic behavior of two firms which can activate R&D investments either to process or to product innovation. I will consider a particular kind of process R&D activity, which I will call Transport and Communication R&D and which aims at increasing the net amount of the product that reaches consumers. I will limit my study to a Cournot duopoly setting. The strategic interaction will be therefore expressed in terms of a two-stage three strategy game, where firms first decide whether to invest in one of the two types of R&D and then they compete in the market by setting quantities. As a result, I will obtain both symmetric and asymmetric equilibria, depending on the relative efficiency of the R&D effort.

Date: 2001
New Economics Papers: this item is included in nep-ind, nep-ino and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:416

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