Original scientific paper
https://doi.org/10.1080/1331677X.2014.952092
Duopoly innovation under product externalities
You-hua Chen
orcid.org/0000-0001-5697-9295
Pu-yan Nie
Abstract
This study argues that product substitutability and complementary have major effects on the relationship between innovation and competition and some interesting conclusions are derived. First, innovative investment is reduced with market power. The total quantity of products and social welfare are increased with market power while decreased with increasing of substitutability or deceasing of complementary. Second, the equilibrium products and innovative investment are lower than those under social optimality. Finally, by comparison with Cournot quantity competition, Bertrand price competition is keener. But the main conclusions are the same under both kinds of competitions.
Keywords
innovation; duopoly; product complementary; product substitutability
Hrčak ID:
171326
URI
Publication date:
20.12.2014.
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