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Prokop Jacek (Warsaw School of Economics, Poland), Wiśnicki Bartłomiej (Warsaw School of Economics, Poland)
R&D Activities in Oligopoly and Social Welfare
International Journal of Management and Economics, 2015, nr 46, s. 134-146, tab., bibliogr. 7 poz.
Zeszyty Naukowe / Szkoła Główna Handlowa. Kolegium Gospodarki Światowej
Opieka socjalna, Konkurencja oligopolistyczna, Konsument
Social services, Oligopolistic competition, Consumer
This paper analyzes the impact of R&D activities in an oligopoly on consumer surplus and social welfare. We use a two-stage model to analyze the behavior of duopolists at the research level, and in the final-product market, under the assumption of linear and quadratic cost functions. Three options for firm competition are considered: 1) Cournot competition at both stages; 2) cooperation at the R&D stage and Cournot competition in the final-product market; and 3) cooperation at both stages. Numerical simulations for various levels of R&D spillovers are conducted to analyze the welfare effects of firm decisions. We conclude that for high levels of technological spillovers, total welfare is highest when firms engage in cooperation at the R&D stage, and compete in the final product market, independent of the shape of cost functions. However, the functional form of production costs has a qualitative impact on welfare when firms fully compete. (original abstract)
The Library of Warsaw School of Economics
The Main Library of the Wroclaw University of Economics
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  5. Prokop, J. (2014), Wspólne przedsięwzięcia badawczo-rozwojowe w duopolu z kwadratowymi kosztami produkcji (Research Joint Ventures in a Duopoly with Quadratic Cost Functions), Zeszyty Naukowe Uniwersytetu Szczecińskiego, 810, Studia i Prace Wydziału Nauk Ekonomicznych i Zarządzania, No. 35 (2), pp. 195-207.
  6. Prokop, J., Karbowski A. (2013), R&D cooperation and industry cartelization, Economics Discussion PapersKiel Institute for the World Economy.
  7. Spence, M. (1984), Cost reduction, competition, and industry performance, Econometrica, 52, No. 1, pp. 101-121.
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