Endogenous R&D symmetry in linear duopoly with one-way spillovers

Antonio Tesoriere

No 2005045, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: A duopoly model of cost reducing R&D-Cournot competition is extended to study the endogenous timing of R&D strategic investment. Under the assumption that R&D spillovers only flow from the R&D leader to the follower, sequential and simultaneous play at the R&D stage are compared, in order to assess the role of technological externalities in stimulating or attenuating endogenous firm asymmetry. The only timing structure of the R&D stage sustainable as subgame-perfect Nash equilibrium involves simultaneous play and zero spillovers.

Keywords: endogenous symmetry; endogenous timing; Stackelberg equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D43 L11 L13 (search for similar items in EconPapers)
Date: 2005-09
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2005045

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