R&D in transport and communication in a Cournot duopoly

Lambertini, Luca ; Mantovani, Andrea ; Rossini, Gianpaolo (2001) R&D in transport and communication in a Cournot duopoly. DOI 10.6092/unibo/amsacta/675.
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Abstract

We analyse R&D activity in transport and communication technology (TCRD), in a Cournot duopoly. Transport and communication costs are of the iceberg type, i.e., using up some portion of the product along its path to the final buyer. Firms invest in TCRD to increase the net amount of the product that reaches consumers. A variety of equilibria arise as a result of the different levels of TCRD efficiency. If TCRD’s productivity is high, the game is a prisoner’s dilemma where both firms invest in TCRD. As the efficiency of the TCRD progressively fades we come across first a chicken game and, then, at lower efficiency, a game with an equilibrium in dominant strategies where the profits are at the highest. Social welfare is maximised by market strategies only when TCRD is very efficient.

Abstract
Tipologia del documento
Monografia (Working paper)
Autori
AutoreAffiliazioneORCID
Lambertini, Luca
Mantovani, Andrea
Rossini, Gianpaolo
Parole chiave
R&D transport and communication costs
Settori scientifico-disciplinari
DOI
Data di deposito
17 Giu 2004
Ultima modifica
17 Feb 2016 14:00
URI

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