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Privatization and entry of a foreign firm with demand uncertainty
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Autores
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Resumo(s)
We investigate the effects of trade with a foreign firm and privatization of the domestic pubUc firm on an incentive
for the domestic firm to reduce costs by undertaking R&D investment, under demand uncertainty. We suppose that the
domestic firm is less efficient than the foreign firm. However, the domestic firm can lower its marginal costs by conducting
cost-reducing R&D investment. We examine the impacts of entry of a foreign firm, and the effects of demand uncertainty, on
decisions upon cost-reducing R&D investment by the domestic firm and how these affect the domestic welfare.
Descrição
Palavras-chave
Industrial organization Game theory Mixed duopoly Social welfare Uncertainty
Contexto Educativo
Citação
Editora
AIP Publishing