Two models of R&D competition in duopoly : two markets with budget constraints and dynamics.
Over the last few decades, research and development (R&D) has played an important role in the growth of global economy. While many R&D papers focus on R&D spillovers, few investigate the R&D spending strategy from a firm’s point of view. In this paper, we aim to formulate a competiti...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project (FYP) |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/48715 |
| _version_ | 1811687210396680192 |
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| author | Li, Siwei. Quan, Jun. Xu, Han. |
| author2 | School of Humanities and Social Sciences |
| author_facet | School of Humanities and Social Sciences Li, Siwei. Quan, Jun. Xu, Han. |
| author_sort | Li, Siwei. |
| collection | NTU |
| description | Over the last few decades, research and development (R&D) has played an important role in the growth of global economy. While many R&D papers focus on R&D spillovers, few investigate the R&D spending strategy from a firm’s point of view. In this paper, we aim to formulate a competitive model of firm’s decision-making that explains the mechanism by which the firm should decide its optimal amount of investment to R&D markets. Through a micro-founded approach, we discuss R&D investment from the firm’s perspective. Analytical models are constructed by modifying some existing game theory models. By discussing both the static case for a one-time competition and the dynamic case where companies compete over continuous time periods; this paper explores the investment strategies of duopoly firms while both compete in R&D in up to two markets. Our results suggest that firms should invest more when the payoff is higher and when it has a higher chance of winning. It is also suggested that “stronger” firm needs to keep investing more to maintain its advantage. |
| first_indexed | 2024-10-01T05:12:41Z |
| format | Final Year Project (FYP) |
| id | ntu-10356/48715 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T05:12:41Z |
| publishDate | 2012 |
| record_format | dspace |
| spelling | ntu-10356/487152019-12-10T12:07:44Z Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. Li, Siwei. Quan, Jun. Xu, Han. School of Humanities and Social Sciences Ernie Gin Swee Teo DRNTU::Social sciences::Economic theory::Microeconomics Over the last few decades, research and development (R&D) has played an important role in the growth of global economy. While many R&D papers focus on R&D spillovers, few investigate the R&D spending strategy from a firm’s point of view. In this paper, we aim to formulate a competitive model of firm’s decision-making that explains the mechanism by which the firm should decide its optimal amount of investment to R&D markets. Through a micro-founded approach, we discuss R&D investment from the firm’s perspective. Analytical models are constructed by modifying some existing game theory models. By discussing both the static case for a one-time competition and the dynamic case where companies compete over continuous time periods; this paper explores the investment strategies of duopoly firms while both compete in R&D in up to two markets. Our results suggest that firms should invest more when the payoff is higher and when it has a higher chance of winning. It is also suggested that “stronger” firm needs to keep investing more to maintain its advantage. Bachelor of Arts 2012-05-08T08:57:14Z 2012-05-08T08:57:14Z 2012 2012 Final Year Project (FYP) http://hdl.handle.net/10356/48715 en Nanyang Technological University 47 p. application/pdf |
| spellingShingle | DRNTU::Social sciences::Economic theory::Microeconomics Li, Siwei. Quan, Jun. Xu, Han. Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. |
| title | Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. |
| title_full | Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. |
| title_fullStr | Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. |
| title_full_unstemmed | Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. |
| title_short | Two models of R&D competition in duopoly : two markets with budget constraints and dynamics. |
| title_sort | two models of r d competition in duopoly two markets with budget constraints and dynamics |
| topic | DRNTU::Social sciences::Economic theory::Microeconomics |
| url | http://hdl.handle.net/10356/48715 |
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