Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/50589
Authors: 
Stepanova, Anna
Year of Publication: 
2009
Series/Report no.: 
School of Economics discussion papers 09,01
Abstract: 
In a two-stage R&D game of process innovation, we investigate the effect of exogenously changing R&D spillovers and market concentration on the equilibrium level of effective cost reduction, total output, profits and social welfare. Interpreting spillover as a measure of patent protection, we find that weaker patent protection results in less R&D. We also show that firms prefer weaker patent protection, but social welfare is maximized for higher levels of patent protection. In terms of market concentration we show that firm profits decrease with increasing numbers of firms. Social welfare is typically maximized under oligopoly with the optimal number of firms depending on the level of spillover and efficiency of R&D investment.
Subjects: 
oligopoly R&D competition
spillover process
cost reduction
market concentration
JEL: 
C72
L13
O31
Document Type: 
Working Paper

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