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Entry, profit and welfare under asymmetric R&D costs: entry, profit and welfare

Mukherjee, Arijit; Ray, Achintya


Professor of Industrial Economics

Achintya Ray


We show the effects of entry of a new firm on the profits and welfare when the firms share the same initial cost of production but differ in terms of the costs of undertaking R&D. Considering a Cournot oligopoly model with innovation and linear demand and production costs, we show that entry reduces the profits of the incumbent firms and it can be welfare reducing.

Journal Article Type Article
Acceptance Date Mar 22, 2013
Online Publication Date Aug 27, 2013
Publication Date 2014-06
Deposit Date Dec 10, 2018
Journal The Manchester School
Print ISSN 1463-6786
Electronic ISSN 1467-9957
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 82
Issue 3
Pages 284-295
Public URL
Publisher URL