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Competition and innovation with horizontal R&D spillovers

By Massoud Khazabi and Nguyen Quyen

Abstract

The paper extends a theoretical framework for analyzing competition and innovation in presence of horizontal spillovers. Introducing two scenarios, it is shown that when firms behave non-cooperatively in both the R&D and production stages the degree of spillover has a negative relationship with the effective and respective R&D expenditures of each firm as well as the level of social welfare. When firms behave cooperatively in the R&D stage, and non-cooperatively in the production stage the relationship between the R&D expenditure of the joint research lab and the number of firms in the market is negative.

Topics: L22 - Firm Organization and Market Structure
Year: 2008
OAI identifier: oai:mpra.ub.uni-muenchen.de:39453

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