Indivisibilities in R & D Investment and Transient Leadership in Oligopoly

Flavio Delbono and V. Denicolo'
Authors registered in the RePEc Author Service: Vincenzo Denicolo' ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In this paper we study a one-shot game of R&D between two price-setting firms that are asymmetrically placed as they produce at different cost levels. The R&D technology displays increasing returns in the form of invisibilities. We show that there exists a unique equilibrium in pure strategies, and we prove that the incumbent has never greater probability of winning the patent race than the rival.

Date: 1988-08
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:52

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