R&amp;D-induced industry polarization and shake-outs

Amir, Rabah; Halmenschlager, Christine; Jin, Jim Y.

doi:10.1016/j.ijindorg.2010.07.007

Cited by 19 publications

(17 citation statements)

References 47 publications

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“…Finally, notice that the asymmetric equilibria only occurs at the turning point at which the firms switch from collaborating in R&D to no collaboration at all. Such asymmetric equilibria in oligopoly R&D games, although in different contexts, are already captured by some studies (see Tesoriere, 2009;Amir et al, 2010Amir et al, , 2011. In the open economy setting, we find that the asymmetric equilibria may arise where the governments, as first mover players, play asymmetric trade policies.…”

Section: The Analysissupporting

confidence: 59%

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International R&D Collaboration and Strategic Trade Policy

Dong

Song

Qian³

2016

Review Development Economics

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We study an international trade model with symmetric countries and symmetric firms, with countries making strategic trade policies, anticipating the decisions of firms on R&D collaboration at the subsequent stage. In general we should observe a conflict between the equilibrium outcome and the efficient one. We find that an asymmetric outcome where one country unilaterally liberalizes trade while the other does not is likely to occur. We also find that while banning international R&D collaboration may help to reach free trade equilibrium in certain situations, it provides little assistance in reaching the outcome that maximizes global welfare.

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Section: The Analysissupporting

confidence: 59%

“…Such asymmetric equilibria in oligopoly R&D games, although in different contexts, are already captured by some studies (see Tesoriere, ; Amir et al, , ). In the open economy setting, we find that the asymmetric equilibria may arise where the governments, as first mover players, play asymmetric trade policies.…”

Section: The Analysismentioning

confidence: 76%

International R&D Collaboration and Strategic Trade Policy

Dong

Song

Qian³

2016

Review Development Economics

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“…1 Yet, despite this ubiquitous and long-standing reliance on linear demand, the present paper will argue that some important foundational and robustness aspects of this special demand function remain less than fully understood. 2 Often limiting consideration to the two-good case, the early literature on linear demand offered a number of clear-cut conclusions both on the structure of linear demand systems as well as on its potential to deliver unambiguous conclusions for some fundamental questions in oligopoly theory. Among the former, one can mention the duality features uncovered in the well known paper by Singh and Vives (1984), namely (i) the dual linear structure of inverse and direct demands (along with the use of roman and greek parameters), (ii) the duality between substitute and complementary products and the invariance of the associated cross-slope 1 Martin (2002) provides an insightful overview of the history of the linear demand system, as well as a comparison between the Bowley and the Shubik specifications.…”

Section: Introductionmentioning

confidence: 99%

On the microeconomic foundations of linear demand for differentiated products

Amir

Erickson

Jin

2017

Journal of Economic Theory

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This paper provides a thorough exploration of the microeconomic foundations for the multivariate linear demand function for differentiated products, which is widely used in industrial organization. The setting is the standard representative consumer with a quasi-linear utility function. A key finding is that strict concavity of the quadratic utility function is critical for the demand system to be well defined. Otherwise, the true demand function may be quite complex: Multi-valued, non-linear and income-dependent. We uncover failures of duality relationships between substitute products and complementary products, as well as the incompatibility between high levels of complementarity and concavity. The two-good case emerges as a special case with strong but non-robust properties. A key implication is that all conclusions derived in applied economic models via the use of linear demand that does not satisfy the Law of Demand ought to be regarded with some suspicion.

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“…6 First, notice that, by the e¢ ciency of pro…le x c , we already know 6 We recall that in Amir's et al (2000) paper, the following ranking is established for simultaneous and sequential payo¤s in the symmetric case:…”

Section: Sequential Randd Investment Gamementioning

confidence: 99%

The Strategic Timing of R&D Agreements

Marini

Petit²,

Sestini

2011

SSRN Journal

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We present a model of endogenous formation of R&D agreements among …rms in which also the timing of R&D investments is made endogenous. The purpose is to bridge two usually separate streams of literature, the endogenous formation of R&D alliances and the endogenous timing literature. This allows to consider the formation of R&D agreements over time. It is shown that, when both R&D spillovers and investment costs are su¢ ciently low, …rms may …nd di¢ cult to maintain a stable agreement due to the strong incentive to invest noncooperatively as leaders. In such a case, the stability of an R&D agreement requires that the joint investment occurs at the initial stage, thus avoiding any delay. When instead spillovers are su¢ ciently high, cooperation in R&D constitutes a pro…table option, although …rms also possess an incentive to sequence their investment over time. Finally, when spillovers are asymmetric and the knowledge mainly leaks from the leader to the follower, to invest as follower becomes extremely pro…table, making R&D alliances hard to sustain unless …rms strategically delay their joint investment in R&D.

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R&D-induced industry polarization and shake-outs

Cited by 19 publications

References 47 publications

International R&D Collaboration and Strategic Trade Policy

International R&D Collaboration and Strategic Trade Policy

On the microeconomic foundations of linear demand for differentiated products

The Strategic Timing of R&D Agreements

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