Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18759 
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1395
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper presents a dynamic model of a competitive R&D and production duopoly subject to knowledge spillovers. Two asymmetric firms operate for a limited period of time and dispose their knowledge capital in the end. Both firms and the social planner prefer the R&Dcooperative strategy over the competitive one regardless of the intensity of knowledge spillovers. Accumulation of knowledge capital results allows the monopolist to have lower marginal cost of production and charge a lower market price than a fully competitive duopoly. Being able to define the degree of knowledge exchange when creating a research joint venture, the firms do not necessary choose the highest degree of cooperation available.
Subjects: 
innovation
R&D
spillovers
cooperation
JEL: 
O31
D21
C72
Document Type: 
Working Paper
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