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R&D Spillovers, Concentration and Market Performance

Anna Stepanova ()
Authors registered in the RePEc Author Service: Anna Cartwright

Studies in Economics from School of Economics, University of Kent

Abstract: In a two-stage R&D game of process innovation, we investigate the effect of exogenously changing R&D spillovers and market concentration on the equilibrium level of effective cost reduction, total output, profits and social welfare. Interpreting spillover as a measure of patent protection, we find that weaker patent protection results in less R&D. We also show that firms prefer weaker patent protection, but social welfare is maximized for higher levels of patent protection. In terms of market concentration we show that firm profits decrease with increasing numbers of firms. Social welfare is typically maximized under oligopoly with the optimal number of firms depending on the level of spillover and efficiency of R&D investment.

Keywords: oligopoly; R&D; competition; spillover process; cost reduction; market concentration (search for similar items in EconPapers)
JEL-codes: C72 L13 O31 (search for similar items in EconPapers)
Date: 2009-02
New Economics Papers: this item is included in nep-com, nep-cse, nep-edu, nep-hrm, nep-knm, nep-lab and nep-mic
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