Oligopoly Theory 11 RD Competition in Oligopoly Strategic

Oligopoly Theory 11. R&D Competition in Oligopoly 今日の講義の目的 （１）Strategic Commitment Game の勘をつかむ （２）R&D競争と経済厚生効果の勘をつかむ OT: Mixed Oligopoly 1

Outline of the 11 th Lecture 11 -1 Strategic R&D Investment 11 -2 Other Strategic Commitment Games 11 -3 Patent Race 11 -4 Licensing Contract 11 -5 Licensing in Hotelling Model OT: Mixed Oligopoly 2

Cost-Reducing Investments Brander and Spencer (1983) Model Duopoly, homogeneous goods market First stage: Each firm i independently chooses Ii (R&D investment level), which affect its production costs. Second stage: After observing firms' production costs, firms face Cournot competition. Payoff: Π 1=P(Y 1+Y 2)-C 1(I 1)Y 1 -I 1 OT: Mixed Oligopoly 6

First stage 第１段階　１階条件 P'Y 1 (∂Y 1 C/∂I 1 + ∂Y 2 C/∂I 1)+P∂Y 1 C/∂I 1 -C 1'(I 1)Y 1 - C 1 ∂Y 1 C/∂I 1 -1=0 P'Y 1∂Y 2 C/∂I 1 -C 1'(I 1)Y 1 -1=0 (envelope theorem) Cost-Minimizing Level -C 1'(I 1)Y 1 -1=0 Investment level exceeds cost minimizing level under strategic substitutes~ strategic effect 自社の限界費用が下がる→ライバルの生産量が減る →価格が上昇→additionalなgain OT: Mixed Oligopoly 8

strategic complementsなら？ Y 2 Cournot 均衡 企業 1の 反応曲線 企業 2の 反応曲線 Y 2* 0 OT: Mixed Oligopoly Y 1* Y 1 37

strategic complementsなら？ 企業 1の 反応曲線 Y 2 企業 2の 反応曲線 Y 2* 0 OT: Mixed Oligopoly Y 1* Y 1 38

Competition and R&D Does competition promote innovation? (a) Monopoly View: Monopoly power accelerates R&D. Monopoly profits ← incomplete financial markets Economies of the scale (b) Competition view: Arrow effect～replacement effect (c) Inverse U-shaped relationship Both monopoly and aggressive competition is harmful for R&D (d) U-shaped relationship Both monopoly and aggressive competition stimulate R&D ←relative performance approach OT: Mixed Oligopoly 39