R&D in a duopoly under incomplete information
Article Type
Research Article
Publication Title
International Journal of Economic Theory
Abstract
The availability of information about rivals may have a significant impact on a firm's decision about R&D investment. This paper investigates how the R&D incentive of a firm in a Cournot duopoly may depend on information structures. We show that asymmetric information about the rival's cost reduction may enhance the research incentive of each firm compared to the complete-information case. However, an additional dimension of asymmetry (e.g. the information about whether the rival has invested in R&D or not) will reduce the R&D incentive unambiguously compared to the one-dimensional asymmetry case.
First Page
341
Last Page
359
DOI
10.1111/ijet.12174
Publication Date
12-1-2019
Recommended Citation
Chatterjee, Rittwik; Chattopadhyay, Srobonti; and Kabiraj, Tarun, "R&D in a duopoly under incomplete information" (2019). Journal Articles. 615.
https://digitalcommons.isical.ac.in/journal-articles/615