R&D Incentives, Compatibility and Network Externalities


Cerquera, Daniel


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URL: http://ub-madoc.bib.uni-mannheim.de/1479
URN: urn:nbn:de:bsz:180-madoc-14792
Document Type: Working paper
Year of publication: 2006
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Subject headings (SWD): Forschung und Entwicklung , Externer Effekt , Netzwerk , Unvollständige Konkurrenz , Innovation
Keywords (English): Network externalities , Innovation , Imperfect Competition.
Abstract: This paper analyzes the impact of network externalities on R&D competition between an incumbent and a potential entrant. The analysis shows that the incumbent always invests more than the entrant in the development of higher quality network goods. However, the incumbent exhibits a too low level of investments, while the entrant invests too much in R&D in comparison with the social optimum. In the model entry occurs too often in equilibrium. These inefficiencies are solely due to the presence of network externalities. By choosing compatible network goods, firms do not necessarily reduce the R&D competition intensity.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Cerquera, Daniel (2006) R&D Incentives, Compatibility and Network Externalities. Open Access [Working paper]
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