Disclosure Policy, and Competition and Cartelization in R&D: Cournot and Bertrand Competition
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This paper considers whether firms have incentives to disclose their R&D information to their rivals in Cournot−quantity setting and Bertrand−price setting models. Furthermore, we compare market performances, e.g. R&D investments, prices and profits, in these models. It is shown that whether they have such incentivesdepends only on the signs of cross−price effects in demand functions, irrespective of the type of competition, e.g. Cournot or Bertrand competition. When making comparisons of them among four modes, we find that the formation of R&D cartels tends to increase the expenditure of R&D investment and then gains more profits.Alternatively, we point out that quantity−setting firms gain more profits in the presence of R&D cooperation than in the absence of it when products are substitutes in terms of Cournot competition.
- Okayama economics review
Okayama economics review 35(4), 331-335, 2004-03