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Multi-market competition, R&D, and welfare in oligopoly

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  • Akio Kawasaki
  • Ming Hsin Lin
  • Noriaki Matsushima

Abstract

We investigate a multi-market Cournot model with strategic process R&D investments wherein a multi-market monopolist meets entrants that enter one of the markets. We find that entry can enhance the total R&D expenditure of the incumbent firm. That is, entry can stimulate R&D effort. Moreover, the incumbent's profit nonmonotonically changes as the number of entrants increases. Depending on the fixed entry costs and R&D technologies, both insufficient and excess entrycan appear.

Suggested Citation

  • Akio Kawasaki & Ming Hsin Lin & Noriaki Matsushima, 2010. "Multi-market competition, R&D, and welfare in oligopoly," ISER Discussion Paper 0796, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:0796
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    Cited by:

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    3. Nobuhiro Mori & Makoto Okamura & Takao Ohkawa, 2020. "Economic Regulation in the Consumer Loans Market," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(4), pages 447-459, December.
    4. Shoji Haruna & Rajeev K. Goel, 2017. "Output subsidies in mixed oligopoly with research spillovers," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(2), pages 235-256, April.

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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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