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| Author: | Qiu, L. D. |
| Title: | On the dynamic efficiency of Bertrand and Cournot equilibria |
| Journal: | Journal of Economic Theory
1997 : JUL, VOL. 75:1, p. 213-229 |
| Index terms: | DUOPOLY R&D COMPETITION EQUILIBRIUM ANALYSIS EFFICIENCY |
| Language: | eng |
| Abstract: | This article compares Bertrand and Cournot equilibria in a differentiated duopoly with R&D competition. The main finding is that the Cournot equilibrium can be more efficient than the Bertrand equilibrium. When R&D is not very costly , firms in Cournot competition invest more in R&D and and have lower production costs than would be the case of Bertrand competition. When spillovers are sufficiently large, the resulting welfare increase from more R&D investment is drastic. |
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