This paper considers the effects of entry in the final goods market when the input market is imperfectly competitive. We show that entry of a new firm may increase profit of the incumbent if the technology of the entrant is sufficiently inferior to that of the incumbent...

This paper aims at participating in the long-lasting debate about the analytical foundations of the Cournot equilibrium. In a homogeneous oligopoly, under standard regularity conditions, we prove that Cournot-Nash emerges both under (i) price competition and Cournot conjectures; and (ii) supply...

We show the effects of Bertrand and Cournot competition on R&D investmentand social welfare in a duopoly with R&D competition where success in R&D isprobabilistic. We show that R&D investments are higher under Bertrand (Cournot)competition when R&D productivities are sufficiently low (high), and...

This paper compares Bertrand and Cournot equilibria in a horizontallydifferentiated duopoly market with non-tournament R&D competition. We consider thatsuccess in R&D is uncertain. We show that whether firms invest more under Cournotcompetition or Bertrand competition is ambiguous and depends on...

This paper shows the possibility of higher welfare under Cournot competitionin an asymmetric cost duopoly when the firms have the option for technology licensing.We find that if there is licensing with up-front fixed-fee, welfare is higher under Cournotcompetition compared to Bertrand...

Especially in many online markets, consumers can readily observe prices, but may need to further inspect products to assess their suitability. We study the effects of product differentiation and search costs on competition and market outcomes in a tractable model of price-directed consumer...

We extend Bresnahan and Reiss’s (1991) model of local oligopoly to allow firm entry and exit over time.In our framework, entrants have to incur sunk costs in order to enter a market. After becomingincumbents, they disregard these entry costs in deciding whether to continue operating or to...

This paper considers welfare effects of entry when the incumbent firmbehaves like a Stackelberg leader in the product market. In contrast to previous work(Klemperer, 1988, Journal of Industrial Economics), we show that entry may alwaysincrease welfare. Using general demand function, we show the...

We show the welfare effects of entry in presence of technology licensingunder Cournot competition. If the entrant is technologically inferior to that of theincumbent then, though licensing reduces (or completely eliminates) excessive entryfor relatively low entry costs, it creates excessive...

This paper shows that technology licensing may be socially undesirable. Possibility of licensing increases the incentive for entry and thus, increases competition. If technology of the incumbent and entrant is sufficiently close, licensing-induced entry reduces social welfare. Otherwise,...