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R&D Competition And Endogenous Spillovers

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  • JIM Y. JIN
  • MICHAEL TROEGE

Abstract

The paper examines firms’ choices between innovation and imitation in duopoly. We show that in the unique equilibrium asymmetric firms choose the same level of expenditure on imitation and the same ratio of innovative cost reduction to output. We evaluate the marginal contribution of innovation and imitation expenditure by small and large firms to consumer surplus and welfare, and discuss the desirability of differentiated R&D subsidies on innovation and imitation in terms of R&D tax rebates.

Suggested Citation

  • Jim Y. Jin & Michael Troege, 2006. "R&D Competition And Endogenous Spillovers," Manchester School, University of Manchester, vol. 74(1), pages 40-51, January.
    • Handle: RePEc:bla:manchs:v:74:y:2006:i:1:p:40-51
    DOI: 10.1111/j.1467-9957.2006.00481.x
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    References listed on IDEAS

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    1. James D. Adams, 2000. "Endogenous R&D Spillovers and Industrial Research Productivity," NBER Working Papers 7484, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Anna Stepanova & Antonio Tesoriere, 2011. "R&D With Spillovers: Monopoly Versus Noncooperative And Cooperative Duopoly," Manchester School, University of Manchester, vol. 79(1), pages 125-144, January.
    2. Amir, Rabah & Jin, Jim Y. & Troege, Michael, 2008. "On additive spillovers and returns to scale in R&D," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 695-703, May.
    3. Adriana Gama & Isabelle Maret & Virginie Masson, 2019. "Endogenous heterogeneity in duopoly with deterministic one-way spillovers," Annals of Finance, Springer, vol. 15(1), pages 103-123, March.
    4. Zhang, Yanfang, 2022. "Competitive investments between basic R&D and applied R&D with information spillovers," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 707-722.
    5. Gianluca Femminis & Gianmaria Martini, 2010. "Spillovers, Disclosure Lags, and Incentives to Innovate: Do Oligopolies Over-Invest in R&D?," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 118(1), pages 47-76.
    6. Ouchida, Yasunori & Goto, Daisaku, 2016. "Environmental research joint ventures and time-consistent emission tax: Endogenous choice of R&D formation," Economic Modelling, Elsevier, vol. 55(C), pages 179-188.
    7. Yanfang Zhang & Yuchang Ji & Qianwen Tan, 2023. "Endogenous spillovers in a non‐tournament R&D duopoly under uncertainty," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 208-214, January.
    8. Gianluca Femminis & Gianmaria Martini, 2008. "Irreversible R&D investment with inter-firm spillovers," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi compila la segreteria, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    9. Samano, Mario & Santugini, Marc & Zaccour, Georges, 2017. "Dynamics in research joint ventures and R&D collaborations," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 70-92.
    10. Slim Ben Youssef & Michèle Breton & Georges Zaccour, 2013. "Cooperating and Non-cooperating Firms in Inventive and Absorptive Research," Journal of Optimization Theory and Applications, Springer, vol. 157(1), pages 229-251, April.
    11. Femminis, Gianluca & Martini, Gianmaria, 2011. "Irreversible investment and R&D spillovers in a dynamic duopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 35(7), pages 1061-1090, July.
    12. Femminis Gianluca & Martini Gianmaria, 2010. "First-Mover Advantage in a Dynamic Duopoly with Spillover," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-46, November.
    13. Ben Youssef, Slim & Breton, Michèle & Zaccour, Georges, 2011. "Cooperating firms in inventive and absorptive research," MPRA Paper 35326, University Library of Munich, Germany.
    14. Rabah Amir & Filomena Garcia & Christine Halmenschlager & Joana Pais, 2011. "R&D As A Prisoner'S Dilemma And R&D‐Avoiding Cartels," Manchester School, University of Manchester, vol. 79(1), pages 81-99, January.
    15. Burr, Chrystie & Knauff, Malgorzata & Stepanova, Anna, 2013. "On the prisoner’s dilemma in R&D with input spillovers and incentives for R&D cooperation," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 254-261.

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