R&D Incentives in Vertically Related Markets
This paper focuses on incentives to invest in research and development (R&D) in vertically related markets. In a bilateral duopoly setup, we consider how process R&D incentives of the firms in both upstream and downstream market depend on the intensity of simultaneous interbrand and intrabra...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 07-2013) |
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| Main Authors: | , |
| Format: | Article |
| Language: | English |
| Published: |
Philipps-Universität Marburg
2013
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | This paper focuses on incentives to invest in research and development (R&D) in vertically related markets. In a bilateral duopoly setup, we consider how process R&D incentives of the firms in both upstream and downstream market depend on the intensity of simultaneous interbrand and intrabrand competition. Among the results: both interbrand and intrabrand competition have twofold effects on R&D incentives. Existence of a vertically related market with imperfect competition lowers both the incentives to invest in process R&D and the competitive advantage through the R&D investment. We will show how the impact of a firm's R&D investments in either market on consumer surplus as well as on the profits of all firms in both markets depends on exogenous parameters. |
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| Physical Description: | 33 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0170 |