Abstract:Abstract. In this paper we attempt to explore the welfare effects of (process) R&D in an asymmetric duopoly with a homogeneous product under Cournot and supply function competitions. To this aim, we consider a two-stage perfect-information game where the duopolists compete in stage one in R&D investments and in stage two either in quantities or in supply functions. Calculating the (subgameperfect Nash) equilibrium of this game numerically for a wide range of initial cost parameters and comparing it to the equi… Show more
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