Managing spillovers: an endogenous sunk cost approach

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11640%2F12%3A00384391" target="_blank" >RIV/00216208:11640/12:00384391 - isvavai.cz</a>

Výsledek na webu

<a href="http://www.cerge-ei.cz/pdf/wp/Wp472.pdf" target="_blank" >http://www.cerge-ei.cz/pdf/wp/Wp472.pdf</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Managing spillovers: an endogenous sunk cost approach

Popis výsledku v původním jazyce

We introduce spillover effect into John Sutton.s (1991,1998) concept of endogenous sunk costs. These sunk costs appear in the form of R&D investment into quality in our framework. We show that with spillovers increasing and the effectiveness of investment in raising quality decreasing, the Sutton lower bound on concentration for an industry decreases and ultimately collapses to zero when spillovers are large enough and/or effectiveness of investment in raising quality is low enough. In the second part,we allow firms to protect their investment against spillovers. We focus on symmetric pure strategy Nash equilibria, where all firms either protect their investment or do not protect at all. Contrary to the result with exogenous spillovers assumed in thefirst part, in the second part of the paper we show that higher ex ante spillovers and/or lower effectiveness of investment in raising quality may induce firms to protect themselves against spillovers, leading to higher investment in qual

Název v anglickém jazyce

Managing spillovers: an endogenous sunk cost approach

Popis výsledku anglicky

We introduce spillover effect into John Sutton.s (1991,1998) concept of endogenous sunk costs. These sunk costs appear in the form of R&D investment into quality in our framework. We show that with spillovers increasing and the effectiveness of investment in raising quality decreasing, the Sutton lower bound on concentration for an industry decreases and ultimately collapses to zero when spillovers are large enough and/or effectiveness of investment in raising quality is low enough. In the second part,we allow firms to protect their investment against spillovers. We focus on symmetric pure strategy Nash equilibria, where all firms either protect their investment or do not protect at all. Contrary to the result with exogenous spillovers assumed in thefirst part, in the second part of the paper we show that higher ex ante spillovers and/or lower effectiveness of investment in raising quality may induce firms to protect themselves against spillovers, leading to higher investment in qual

Druh

O - Ostatní výsledky

CEP obor

AH - Ekonomie

OECD FORD obor

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Projekt

<a href="/cs/project/GAP402%2F12%2F0961" target="_blank" >GAP402/12/0961: Řízení vedl. efektů výsledků výzkumu a vývoje a porušování práv duš. vlastnictví v prostředí oligopolu: vybrané teoretické a empirické faktory</a><br>

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2012

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů