The objective in this paper is to study the R&D investment and pricing strategies of two firms competing for consumer demand in a dynamic setup. A firm’s R&D is production cost-reducing and can benefit the rival firm without payment. The paper compares open-loop and closed-loop Nash strategies to determine the extent at which they affect the pricing and R&D investment decisions and the payoffs of the competitors.
EL OUARDIGHI, F., SHNIDERMAN, M. and PASIN, F. (2013). Cost-Reducing R&D with Free Spillovers and Price Competition in a Dynamic Duopoly. In: 26th EURO – INFORMS Joint International Conference.