Delegation vs Cost-Reducing R&D in a Cournot Duopoly

Lambertini, Luca ; Primavera, Gabriele (2000) Delegation vs Cost-Reducing R&D in a Cournot Duopoly. DOI 10.6092/unibo/amsacta/697.
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Abstract

We describe a duopoly model where stockholders assess the relative profitability of delegation versus process innovation. Delegation may not be a dominant strategy. When it is, the game is not necessarily a prisoners’ dilemma. Our model yields several equilibria where at least one firm remains entrepreneurial and finds it preferable to undertake cost-reducing R&D activities. Then, we introduce the possibility of using delegation and cost-reducing R&D jointly. The use of R&D investment by entrepreneurial firms is a dominated strategy, so that firms always separate ownership from control, while they don’t necessarily combine delegation with process innovation.

Abstract
Tipologia del documento
Monografia (Working paper)
Autori
AutoreAffiliazioneORCID
Lambertini, Luca
Primavera, Gabriele
Parole chiave
Cournot behaviour delegation cost-reducing R&D
Settori scientifico-disciplinari
DOI
Data di deposito
17 Giu 2004
Ultima modifica
17 Feb 2016 14:01
URI

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