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We investigate the incentive and the welfare implications of a merger when heterogeneous oligopolists compete both in … process R&D and on the product market. We examine how a merger affects the output, investment, and profits of firms, whether … firms have merger incentives, and, if so, whether such mergers are desirable from the viewpoint of social welfare. We also …
Persistent link: https://www.econbiz.de/10013156465
We revisit an endogenous timing game with consumers who are heterogeneous in their willingness to pay (WTP). Previous studies have shown that when firms compete in quantity, a simultaneous moving outcome (leader-leader) must be presented in equilibrium. In contrast to this result, we find that...
Persistent link: https://www.econbiz.de/10012937235
We investigate what kind of competitive pressure induces existing firms to engage in more intensive innovation activities. We examine two types of competitive pressure: a price decrease in competitive fringe firms and a quality improvement therein. We use an oligopoly model with vertical...
Persistent link: https://www.econbiz.de/10014040261
Innovators who have developed advanced technologies, along with launching new products by themselves, often license these technologies to their rivals. When a firm launches a new product, product positioning is also an important matter. Using a standard linear city model with two firms, we...
Persistent link: https://www.econbiz.de/10014194706
We investigate the effects of restricting locations of firms into Hotelling duopoly models. In the standard location-price models, the equilibrium distance between firms is too large from the viewpoint of consumer welfare. Thus, restricting locations of firms and reducing the distance between...
Persistent link: https://www.econbiz.de/10014200961
This paper formulates a duopoly model in which firms care about relative profits as well as their own profits. Our purpose is to investigate the relationship between the weight of relative performance and R&D expenditure. We find a non-monotone relationship between the weight of relative...
Persistent link: https://www.econbiz.de/10014204559
We examine whether cooperation in R&D leads to product market collusion. Suppose that firms engage in a stochastic R&D race while maintaining the collusive equilibrium in a repeated-game framework. Innovation under competitive R&D creates inter-firm asymmetries, which destabilizes the collusive...
Persistent link: https://www.econbiz.de/10014221707
AT&T was known for both funding a world-class research lab and delaying deployment of useful innovations from the lab. To explain this behavior we consider a model with an incumbent facing a potential entrant. The incumbent can choose from two technologies for production: old and new. The...
Persistent link: https://www.econbiz.de/10014221709
This paper analyzes the situation in which a national government introduces environmental regulations. Within the framework of an international duopoly with environmental regulations, this paper shows that an environmental tax imposed by the government in the home country can induce a foreign...
Persistent link: https://www.econbiz.de/10014162524
We extend the well-known spatial competition model (d'Aspremont et al., 1979) to a continuous time model in which two firms compete in each instance. Our focus is on the entry timing decisions of firms and their optimal locations. We demonstrate that the leader has an incentive to locate closer...
Persistent link: https://www.econbiz.de/10014141414