Delbono, Flavio ; Denicolò, Vincenzo
(1988)
Indivisibilities in R & D Investment and Transient Leadership in Oligopoly.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 24.
DOI 10.6092/unibo/amsacta/5362.
In: Quaderni - Working Paper DSE
(52).
ISSN 2282-6483.
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Abstract
In this paper we study a one-shot game of R&D between two price-setting firms that are asymmetrically placed as they produce at different cost levels. The R&D technology displays increasing returns in the form of invisibilities. We show that there exists a unique equilibrium in pure strategies, and we prove that the incumbent has never greater probability of winning the patent race than the rival.
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