This paper analyzes how the transferability of production capacities from an established to a new product influences the incentives of a firm to invest in R&D. A dynamic duopoly model is considered, where initially both firms offer a homogeneous product. The firms invest in production capacities...

The paper addresses the question how production capacities on an established market affect the innovativeness of firms. We analyze the strategic interactions in an oligopoly setting where firms offer an established product and have the option to offer an additional new product. We show that the...

In this paper we are studying the question under which circumstances a firm with a first-mover advantage may get leapfrogged by a follower. At the market stage we assume a Stackelberg structure, i.e. the leader commits to a quantity and the follower then reacts to it. It is well-known that the...