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...

Distribution channels in which a common retailer undertakes long-term investments and coordinates the sale of competing products are prevalent in many industries. We study how the allocation of bargaining power among the retailer and the suppliers affects investment incentives, market shares,...

We study competition between an original equipment manufacturer (OEM) and its contract manufacturer (CM). The CM manufactures a product for the OEM and sells it to the OEM. Contract terms are determined through Nash bargaining. The CM also manufactures its own product and both products are sold...

We analyze the effect of external financing and associated bankruptcy threat on the speed of product innovation in a market characterized by technological and demand uncertainty. In a dynamic market setting we characterize the optimal R&D investment strategy of a monopolistic incumbent firm that...

This paper investigates, both theoretically and empirically, the implications that complementary assets needed for the formation of start-ups - proxied by the ease of access to financial resources - have on the innovative efforts of incumbent firms. In particular, we develop a theoretical model,...

We study investments in R&D and the formation of R&D clusters of firms which are competitors in the market. In a three stage game, firms first decide on long-term R&D investment, then form research clusters according to the unanimity game introduced in Bloch(1995), and finally compete in...