Research joint ventures in a duopoly with quadratic cost functions Cover Image

Wspólne przedsięwzięcia badawczo-rozwojowe w duopolu z kwadratowymi kosztami produkcji
Research joint ventures in a duopoly with quadratic cost functions

Author(s): Jacek Prokop
Subject(s): Economy
Published by: Wydawnictwo Naukowe Uniwersytetu Szczecińskiego
Keywords: research joint ventures; quadratic cost functions; duopolistic competition; cartels

Summary/Abstract: The objective of this paper is to investigate the impact of competition in the final product market on R&D activity of firms, especially in the case of research joint ventures. In contrast to the preceding literature, it has been assumed that the manufacturing costs are described by a quadratic function. For simplicity, the case of duopoly has been considered. First, the effects of Cournot competition on the R&D investments have been analyzed. Next, the impact of cartel creation on the level of cost-reducing expenditures have been investigated. Numerical analysis has shown that research joint ventures generate the lowest level of R&D investments when the firms do not coordinate their decisions. The firms participating in a joint venture make the largest costreducing expenditures when they fully cartelize the industry

  • Issue Year: 2014
  • Issue No: 35/2
  • Page Range: 195-207
  • Page Count: 13
  • Language: Polish