Product homogeneity as a prisoner's dilemma in a duopoly with R&amp;D

Lambertini, Luca; Rossini, Gianpaolo

doi:10.1016/s0165-1765(98)00011-1

Cited by 32 publications

(20 citation statements)

References 4 publications

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“…Lambertini and Rossini (1998) also show prisoner's dilemma in an innovation game with positive externality. However, in contrast to them, we show prisoner's dilemma without externality and it increases imitative innovation in our article.…”

mentioning

confidence: 85%

“…However, in contrast to them, we show prisoner's dilemma without externality and it increases imitative innovation in our article. Further,Bernhofen and Bernhofen (1999) explain that the argument ofLambertini and Rossini (1998) is misleading and show that the parameter configuration that most likely generates the equilibrium with no innovation inLambertini and Rossini (1988) is least likely to generate prisoner's dilemma. In contrast, prisoner's dilemma in our analysis occurs whenever we have a unique equilibrium under process patent where both firms do imitation.Downloaded by [Stanford University Libraries] at 12:39 08 October 2012 PATENTS, IMITATION AND WELFARE…”

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confidence: 99%

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Patents, imitation and welfare

Mukherjee

Ray

2007

Economics of Innovation and New Technology

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We consider the effects of product and process patents on profits and welfare. In a duopoly model, we show that if the cost of imitation is not very large, prisoner's dilemma occurs under process patent, thus creating lower profit of each firm under process patent than under product patent. Welfare is higher under process (product) patent for very small (not very small) cost of imitation. Although the possibility of cross-licensing never makes lower welfare under process patent for all costs of imitation, welfare is never lower under product patent under infinitely repeated game.Cross-licensing, Prisoner's dilemma, Process patent, Product patent, Repeated game, Welfare,

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confidence: 85%

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confidence: 99%

Patents, imitation and welfare

Mukherjee

Ray

2007

Economics of Innovation and New Technology

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“…6 If both firms invest in product differentiation, the analysis will be a bit more complicated due to the presence of strategic and non-strategic incentives for investments in product differentiation. In this situation, as in Lambertini and Rossini (1998), there are several possible equilibria -both firms invest in product differentiation, only one firm invests in product differentiation, and no firm invests in product differentiation. We avoid this investment game for showing our results in the simplest way, since this investment game does not add much to our main purpose.…”

Section: The Basic Modelmentioning

confidence: 99%

Patent protection under endogenous product differentiation

Mukherjee

2013

Asia-Pacific Journal of Accounting & Economics

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It is generally believed that a weak patent protection makes the consumers and the society better off compared to a strong patent protection by increasing the intensity of competition if the weak patent protection does not affect innovation. We show that this conclusion may not hold if the innovator can take other non-production strategies, such as product differentiation, to reduce the intensity of product-market competition. A weak patent protection may reduce consumer surplus and social welfare by inducing product differentiation by the innovator. We show that the type of product-market competition and the market demand function play important roles in this respect. Hence, there can be an argument for a strong patent protection even if it does not affect innovation.

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“…This is because differentiation is horizontal, and so there is no natural relationship between σ i and its cost, as there would be if σ i were a measure of quality. Our approach is analogous to Lambertini and Rossini's (1998), who introduce a fixed cost per specification of θ . Given that we do restrict firms to choose one specification only, this fixed cost nets out in all the pay-off calculations.…”

Section: Firm 1 Establishes Direct Production In Country Bmentioning

confidence: 99%

Product Differentiation and the Location of International Production

Fraja¹,

Norman²

2004

Economics Manag Strategy

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We analyze how product differentiation influences firms' choice between exporting and foreign direct investment. When product specifications are determined endogenously, we show that there is no symmetric solution to the product specification subgame. The cost disadvantage of an exporting firm translates into a disadvantage in product specification. Overseas production is favored if this allows the investing firm to adopt a more aggressive product specification. Our analysis suggests an ambiguous relationship among location, product differentiation, and cost and demand functions, confirmed by the existence of a parameter range for which there is no pure strategy equilibrium in location choice.

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Product homogeneity as a prisoner's dilemma in a duopoly with R&D

Cited by 32 publications

References 4 publications

Patents, imitation and welfare

Patents, imitation and welfare

Patent protection under endogenous product differentiation

Product Differentiation and the Location of International Production

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