Research and development with stock-dependent spillovers and price competition in a duopoly
The authors consider the problem of the research and development (R \& D) accumulation and price competition between two identical firms in a differential game framework. Each firm forms its R \& D stock \(X_{i}(t)\), \(i = 1,2\), via investment \(u_{i} (t) \geq 0\) such that \(\dot {X}_{i} (t) = u_{i} (t)\), \(X_{i} (0) = 0\), \(0 \leq t \leq T\), where the time horizon \(T\) is finite and fixed. Firm \(i\) reduces its production cost by increasing its stock \(X_{i} (t)\), and due to free spillovers, it can benefit from its competitor's stock \(X_{j} (t)\), \(j \neq i\). More in detail, it turns out from knowledge accumulation which is modeled as \(Z_{i} (t) := X_{i} (t) + \varepsilon X_{j} (t)\), ``where \(0 \leq \varepsilon \leq 1\) is a parameter for the costless spillover effect, such that \(\varepsilon = 0\) reflects the case of full R \& D appropriability and \(\varepsilon = 1\) the case of perfect R \& D spillovers. It is assumed that firm \(i\)'s consumer demand is depended on both firms' prices \(p_{i} (t)\) and \(p_{j} (t)\) linearly: \(S_{i} (p_{i} (t),p_{j} (t)) := \alpha - \beta p_{i} (t) + \gamma p_{j} (t) \geq 0\) with parameters \(\alpha > 0\), \(0 \leq \gamma < \beta \). The objective function of each firm is as follows: \[ \Pi _{i} = \int_{0}^{T} \left[ (p_{i} (t) - c + Z_{i} (t)) S_{i}(t) - u_{i}(t)^{2}/2 \right] dt + mS_{i} (T) \] with parameters \(c > 0\) and \(m > 0\). Each firm maximizes its objective function via its price \(p_{i} (t)\) and investment \(u_{i} (t)\). This differential game is investigated with respect to Nash equilibrium under two assumptions about the observability of the competitor's current R \& D stock.
- scientific article; zbMATH DE number 764435
- scientific article; zbMATH DE number 5685530
- Price competition and technology licensing in a dynamic duopoly
- On a dynamic model of cooperative and noncooperative R and D in oligopoly with spillovers
- A differential R\& D game: Implications for knowledge-based growth models
- Dynamic games of innovation
- Dynamic pricing, product and process innovation
- Dynamic R\&D with spillovers: competition vs cooperation
- scientific article; zbMATH DE number 1734466 (Why is no real title available?)
- Industry Structure and Cost-Reducing Investment
- Innovation timing games: a general framework with applications
- Market Structure and Innovation
- Noncooperative versus cooperative R\&D with endogenous spillover rates
- On the Diffusion of New Technology: A Game Theoretic Approach
- One-way spillovers, endogenous innovator/imitator roles, and research joint ventures
- Open-loop and closed-loop equilibria in dynamic games with many players
- Preemption and Rent Equalization in the Adoption of New Technology
- R & D Spending and product pricing
- Supplier-Manufacturer Collaboration onNew Product Development
- Timing of Innovations Under Rivalry
- Tractable classes of nonzero-sum open-loop Nash differential games: Theory and examples
- Independent research and development or technology mergers and acquisitions? Decision mechanisms of research and development strategies in a two-stage game
- Incentive contracts under product market competition and R\&D spillovers
- On the stability and multistability in a duopoly game with R\&D spillover and price competition
- On a dynamic model of cooperative and noncooperative R and D in oligopoly with spillovers
- Learning by doing with spillovers: strategic complementarity versus strategic substitutability
- Research on dynamic pricing and R\&D investment decisions of enterprises for different commodity qualities
- scientific article; zbMATH DE number 1842073 (Why is no real title available?)
- scientific article; zbMATH DE number 764435 (Why is no real title available?)
- scientific article; zbMATH DE number 5685530 (Why is no real title available?)
- Irreversible investment and R\&D spillovers in a dynamic duopoly
- Duopoly price competition with quality improvement spillover
- R&D subsidies in a duopoly market with outsourcing to the rival firm
- A differential game analysis of the firms' process innovation with technological spillover under different market structures in a duopoly market
- Price competition and technology licensing in a dynamic duopoly
- Stochastic control model for R\&D race in a mixed duopoly with spillovers and knowledge stocks
This page was built for publication: Research and development with stock-dependent spillovers and price competition in a duopoly
Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q2247909)
