Cooperative R&D and Strategic Trade Policy with Bertrand Competition
This paper uses a strategic trade policy model to analyze the welfare effects from allowing cooperation in R&D when firms compete in a price-setting game in the product market. A policy game between two governments is analyzed, where each government chooses a particular cooperative R&D policy in order to maximize national welfare. At the Nash equilibrium to this game only one government allows cooperation in R&D. This equilibrium is both individually and jointly optimal. International cooperation in R&D is superior to no cooperation in R&D but is inferior to the Nash equilibrium of the government policy game. Copyright © 2008 The Author.
Year of publication: |
2008
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Authors: | Carlson, Julie |
Published in: |
Review of International Economics. - Wiley Blackwell, ISSN 0965-7576. - Vol. 16.2008, 2, p. 355-367
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Publisher: |
Wiley Blackwell |
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