Cost reducing incentives in a mixed duopoly market

This note studies the cost-reducing incentives in a mixed duopoly market. The result shows that while a profit-maximizing private firm carries out the cost-reducing investment, a social welfare-maximizing firm does not have an incentive to reduce its costs as long as the market share of the private firm is sufficiently large.

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Year of publication:	2005-01-26
Authors:	Ogawa, Hikaru ; Lin, Ming Hsin
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 12.2005, 6, p. 1-6
Publisher:	AccessEcon
Subject:	cost-reducing innovation

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Extent:	application/pdf
Type of publication:	Article
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; L3 - Nonprofit Organizations and Public Enterprise
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010630110