Product market competition and R&D rivalry

Document Type

Journal article

Source Publication

Economics Letters

Publication Date

1-1-1998

Volume

58

Issue

1

First Page

105

Last Page

111

Publisher

Elsevier B.V.

Keywords

R&D rivalry, product market competition

Abstract

This paper analyzes the impact of a future R&D race on current firm behavior in the product market. It is shown that, in order to “soften” rivals in the future R&D race, firms behave less aggressively in the pre-innovation product market than in the standard duopoly models. As a result, the R&D rates are lower than what firms would choose if standard duopoly outcomes are assumed. R&D cooperation is shown to be capable of restoring the duopoly outcome.

DOI

10.1016/S0165-1765(97)00176-6

Print ISSN

01651765

E-ISSN

18737374

Publisher Statement

Copyright © 1998 Elsevier S.A.

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Lin, P. (1998). Product market competition and R&D rivalry. Economics Letters, 58(1), 105-111. doi: 10.1016/S0165-1765(97)00176-6

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