This paper formulates a duopoly model of firms concerned with relative profits as well as their own profits and investigates the relationship between the degree of competitiveness in a market and R&D expenditure. We find a non-monotone relationship between the two variables. When the duopoly...

This paper examines the strategic commitment behavior of heterogeneous leaders in an endogenous market structure. We demonstrate that each leader's investment level is independent of the other leaders' characters. Furthermore, we show that a leader over-invests (resp. under-invests) when an...