R&D AND OUTPUT BEHAVIOR OF DUOPOLISTIC FIRMS WITH CONJECTURAL VARIATIONS IN R&D
R&D AND OUTPUT BEHAVIOR OF DUOPOLISTIC FIRMS WITH CONJECTURAL VARIATIONS IN R&D

Summary/Abstract: We analyze R&D and output behavior of oligopolistic firms under R&D spillover when they possess conjectural variations in R&D. By use of the conjectural variations approach, the preceding researches on R&D are extended to more general analysis and the behavior of actual firms in a lot of industries are more elucidated. This paper shows that the results on the R&D and output behavior are totally reversed by whether firms act in an aggressive or a passive way in the R&D decision. It is demonstrated that the conventional results hold under a range of competition or collusion as well. CVs in R&D play a crucial role in determining the level of technological improvement.

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