R&D competition and the persistence of technology leadership

Beladi, Hamid; Mukherjee, Arijit

Abstract

We show that whether a technology leader invests more in R&D compared to a technology follower may depend on the R&D process and whether the follower is in the market. Considering Cournot competition, we show that if the firms are in the market, the technology leader (follower) invests more in R&D under a step-by-step R&D process (when the firms target similar technologies). However, if the technology follower can enter the market only if it is successful in R&D, the technology follower may invest more (invests more) in R&D under the step-by-step R&D process (when the firms target similar technologies). We also show the implications of Bertrand competition. * We thank two anonymous referees of this journal for valuable comments and suggestions. The usual disclaimer applies.

Citation

Beladi, H., & Mukherjee, A. (2022). R&D competition and the persistence of technology leadership. International Journal of Economic Theory, 18(3), 272-284. https://doi.org/10.1111/ijet.12289

• Journal Article Type: Article
• Acceptance Date: Jun 17, 2020
• Online Publication Date: Jul 27, 2020
• Publication Date: 2022-09
• Deposit Date: Jun 18, 2020
• Publicly Available Date: Jul 28, 2022
• Journal: International Journal of Economic Theory
• Print ISSN: 1742-7355
• Electronic ISSN: 1742-7363
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 18
• Issue: 3
• Pages: 272-284
• DOI: https://doi.org/10.1111/ijet.12289
• Keywords: Innovation; Technology leader; Technology follower
• Public URL: https://nottingham-repository.worktribe.com/output/4671906
• Publisher URL: https://onlinelibrary.wiley.com/doi/abs/10.1111/ijet.12289
• Additional Information: This is the peer reviewed version of the following article: Beladi, H, Mukherjee, A. R&D competition and the persistence of technology leadership. Int J Econ Theory. 2020; 1– 13, which has been published in final form at https://doi.org/10.1111/ijet.12289. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.