Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92778
Authors: 
Matsumura, Toshihiro
Matsushima, Noriaki
Cato, Susumu
Year of Publication: 
2009
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 752
Abstract: 
This paper formulates a duopoly model in which firms care about relative profits as well as their own profits. Our purpose is to investigate the relationship between the weight of relative performance and R&D expenditure. We find a non-monotone relationship between the weight of relative performance in their objectives and their R&D levels. Both highly reciprocal (altruism) and negative reciprocal attitudes yield high levels of R&D, while the intermediate situations yield low levels of R&D.
Subjects: 
relative profit
innovation
spite
altruism
JEL: 
L21
O31
L13
Document Type: 
Working Paper

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