Price vs Quantity in a Duopoly with Technological Spillovers: A Welfare Re-Appraisal

Lambertini, Luca ; Mantovani, Andrea (2000) Price vs Quantity in a Duopoly with Technological Spillovers: A Welfare Re-Appraisal. DOI 10.6092/unibo/amsacta/685.
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Abstract

We analyse the problem of the choice of the market variable in a model where firms activate R&D investments for process innovation. We establish that (i) firms always choose the Cournot behaviour; and (ii) there exists a set of the relevant parameters where a benevolent social planner prefers quantity setting to price setting. This happens when the marginal cost of R&D activities is relatively low while technological externalities are relatively high. In this situation, the conflict between social and private preferences over the type of market behaviour disappears.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Mantovani, Andrea
Keywords
price quantity R&D, spillovers
Subjects
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 14:00
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