Stochastic Innovation and Product Market Organization.
This paper analyzes how different types of product market organization affect firms' R&D investments in a stochastic innovation framework. Product market competition determines payoffs to successful and unsuccessful firms. Restrictions on the research project success probability distribution are identified that yield an invariance result for expenditure per R&D project. The impact of the number of firms (n) on the amount of market R&D is shown to be sensitive to product market organization. For a major process innovation, firms undertake more R&D projects under Cournot product market competition than under Bertrand competition, for "n" sufficiently large. A numerical example is used to illustrate welfare tradeoffs.
Year of publication: |
1992
|
---|---|
Authors: | Reynolds, Stanley S ; Isaac, R Mark |
Published in: |
Economic Theory. - Springer. - Vol. 2.1992, 4, p. 525-45
|
Publisher: |
Springer |
Saved in:
Saved in favorites
Similar items by person
-
Appropriability and Market Structure in a Stochastic Invention Model.
Isaac, R Mark, (1988)
-
Cotenancy and Competition in an Experimental Auction Market for Natural Gas Pipeline Networks.
Rassenti, Stephen J, (1994)
-
INTERMITTENCY AND THE VALUE OF RENEWABLE ENERGY
Gowrisankaran, Gautam, (2011)
- More ...