Ferreira, Fernanda A.2014-05-282014-05-282009978-0-7354-0709doi: 10.1063/1.3241649http://hdl.handle.net/10400.22/4389We 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.engIndustrial organizationGame theoryMixed duopolySocial welfareUncertaintyconference object10.1063/1.3241649