We show that if patent protection and trade secrecy generate asymmetricmarket structure, an innovator may prefer patent protection than trade secrecy even ifthe diffusion probability is higher under the former but it increases marketconcentration by preventing some imitators...

We provide a theoretical justification for bi-sourcing, which refers to thesituation where a final goods producer buys an input from an outside supplier and alsoproduces it in-house. Bi-sourcing occurs if the marginal cost of producing the input inhouseis higher than the marginal cost of outside...

We show the effects of Bertrand and Cournot competition on R&D investmentand social welfare in a duopoly with R&D competition where success in R&D isprobabilistic. We show that R&D investments are higher under Bertrand (Cournot)competition when R&D productivities are sufficiently low (high), and...

This paper considers welfare effects of entry when the incumbent firmbehaves like a Stackelberg leader in the product market. In contrast to previous work(Klemperer, 1988, Journal of Industrial Economics), we show that entry may alwaysincrease welfare. Using general demand function, we show the...

We show the welfare effects of entry in presence of technology licensingunder Cournot competition. If the entrant is technologically inferior to that of theincumbent then, though licensing reduces (or completely eliminates) excessive entryfor relatively low entry costs, it creates excessive...

This paper considers the effects of entry in the final goods market when the input market is imperfectly competitive. We show that entry of a new firm may increase profit of the incumbent if the technology of the entrant is sufficiently inferior to that of the incumbent...

In a recent paper Mujumder (2004, Economics Letters) argued that only if the industry is a monopoly, we could be certain that the government could use profit tax to make up any shortfall in tariff revenue and also make the consumers and producers better off. We show that this result is not...

This paper shows that if number of firms is determined endogenously, Cournot competition generates higher welfare compared to Bertrand competition when products are sufficiently differentiated. If products are close substitutes, welfare is higher under Bertrand competition. We show that the...