Endogenous Transportation Technology in a Cournot Differential Game with Intraindustry Trade

Colombo, Luca ; Lambertini, Luca ; Mantovani, Andrea (2003) Endogenous Transportation Technology in a Cournot Differential Game with Intraindustry Trade. DOI 10.6092/unibo/amsacta/620.
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Abstract

We investigate a dynamic Cournot duopoly with intraindustry trade, where firms invest in R&D to reduce the level of iceberg transportation costs. We adopt both open-loop and closed-loop equilibrium concepts, showing that a unique (saddle point) steady state exists in both cases. In the open-loop model, optimal investments and the resulting efficiency of transportation technology are independent of the relative size of the two countries. On the contrary, in the closed-loop case, a home market effect operates so that thefirm located in the larger country invests more than the rival located in the smaller one. Policy implications are also evaluated.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Colombo, Luca
Lambertini, Luca
Mantovani, Andrea
Keywords
R&D differential games transport and communication costs intraindustry trade
Subjects
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 13:58
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