Download This PaperRelative Performance and R&D Competition
ISER Discussion Paper No. 752
20 Pages Posted: 28 Aug 2009
Date Written: August 26, 2009
Abstract
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 performance in their objectives and their R&D levels. Both highly reciprocal (altruism) and negative reciprocal attitudes yield high levels of R&D, while the intermediate situations yield low levels of R&D.
Keywords: relative profit, innovation, spite, altruism
JEL Classification: L21, O31, L13
Suggested Citation: Suggested Citation
Matsumura, Toshihiro and Matsushima, Noriaki and Cato, Susumu and Economic Research, Institute of Social and, Relative Performance and R&D Competition (August 26, 2009). ISER Discussion Paper No. 752, Available at SSRN: https://ssrn.com/abstract=1462540 or http://dx.doi.org/10.2139/ssrn.1462540
Do you have a job opening that you would like to promote on SSRN?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.