Stochasticity favoring the effects of the R&D strategies of the firms

Pinto, Alberto A.; Oliveira, Bruno M. P. M.; Ferreira, Fernanda A.; Ferreira, Flávio

http://hdl.handle.net/10400.22/7357

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Authors

Pinto, Alberto A.

Oliveira, Bruno M. P. M.

Ferreira, Fernanda A.

Ferreira, Flávio

Abstract(s)

We present stochastic dynamics on the production costs of Cournot competitions, based on perfect Nash equilibria of nonlinear R&D investment strategies to reduce the production costs of the firms at every period of the game. We analyse the effects that the R&D investment strategies can have in the profits of the firms along the time. We observe that, in certain cases, the uncertainty can improve the effects of the R&D strategies in the profits of the firms due to the non-linearity of the profit functions and also of the R&D parameters.