Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83954
Authors: 
Hasnas, Irina
Lambertini, Luca
Palestini, Arsen
Year of Publication: 
2013
Series/Report no.: 
DICE Discussion Paper 111
Abstract: 
In recent years Open Innovation (OI) processes have been receiving growing attention from the empirical and theoretical economic literature, where a debate is taking place on the aspects of complementarity or substitutability between internal R&D and OI spillover. By means of a differential game approach, we analyze the case of substitutability in an OI setup in a Cournot duopoly where knowledge spillovers are endogenously determined via the R&D process. The game produces multiple steady states, allowing for an asymmetric solution where a firm may trade off the R&D investment against information absorption from the rival. The technical analysis and the numerical simulations point out that the firm which commits to a higher level of OI absorption produces a smaller output and enjoys higher profits than its rival.
Subjects: 
R&D
spillovers
dynamic games
JEL: 
C73
L13
O31
ISBN: 
978-3-86304-110-6
Document Type: 
Working Paper

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