Multi-Market Competition, R&D, and Welfare in Oligopoly
Kagoshima University - Faculty of Education
Ming Hsin Lin
Chukyo University - Department of Economics
Osaka University - Institute of Social and Economic Research
October 4, 2010
ISER Discussion Paper No. 796
We investigate a multi-market Cournot model with strategic process R&D investments wherein a multi-market monopolist meets entrants that enter one of the markets. We find that entry can enhance the total R&D expenditure of the incumbent firm. That is, entry can stimulate R&D effort. Moreover, the incumbent’s profit nonmonotonically changes as the number of entrants increases. Depending on the fixed entry costs and R&D technologies, both insufficient and excess entry can appear.
Number of Pages in PDF File: 25
Keywords: multi-market, oligopoly, process R&D, entry, welfare
JEL Classification: L13, O32, L11working papers series
Date posted: October 27, 2010
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