This paper constructs an ex-ante asymmetric R&D Cournot differential game with knowledge spillovers. It shows that in the long-run equilibrium firms have incentives to innovate as long as the knowledge externalities are bidirectional. We also carry out a series of numerical simulations of the...

In a recent paper, Tramontana (Economic Modelling, 27; 350–357, 2010) investigates the stability properties of a Cournot Duopoly game when the demand function is isoelastic. In this note, we show that for some well known applications of two-stage Cournot games (D. Aspremont and Jacquemin,...

This paper shows that innovation (or Schumpeter's) cycles can be demonstrated in a discrete and finite dynamic game of innovation and imitation. We find that the cycles depend crucially on whether imitation is a credible threat and hence, we conclude that strategic interactions are sufficient to...

We consider a simple oligopoly model where firms engage in cost-reducing R&D and compare two R&D regimes: R&D competition and R&D cooperation in the form of a research joint venture (RJV). We introduce coordination costs for the RJV and examine how these affect the equilibrium outcomes.