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Can a larger market foster R&D under monopolistic competition with variable mark-ups? / Bykadorov, Igor; Kokovin, Sergey.

In: Research in Economics, Vol. 71, No. 4, 01.12.2017, p. 663-674.

Research output: Contribution to journal › Article › peer-review

Harvard

Bykadorov, I & Kokovin, S 2017, 'Can a larger market foster R&D under monopolistic competition with variable mark-ups?', Research in Economics, vol. 71, no. 4, pp. 663-674. https://doi.org/10.1016/j.rie.2017.10.006

APA

Bykadorov, I., & Kokovin, S. (2017). Can a larger market foster R&D under monopolistic competition with variable mark-ups? Research in Economics, 71(4), 663-674. https://doi.org/10.1016/j.rie.2017.10.006

Vancouver

Bykadorov I, Kokovin S. Can a larger market foster R&D under monopolistic competition with variable mark-ups? Research in Economics. 2017 Dec 1;71(4):663-674. doi: 10.1016/j.rie.2017.10.006

Author

Bykadorov, Igor ; Kokovin, Sergey. / Can a larger market foster R&D under monopolistic competition with variable mark-ups?. In: Research in Economics. 2017 ; Vol. 71, No. 4. pp. 663-674.

BibTeX

@article{770c17af6acd4c18b23fd929f8dbb092,
title = "Can a larger market foster R&D under monopolistic competition with variable mark-ups?",
abstract = "We study monopolistic competition with symmetric directly additive preferences (generating variable mark-ups) and an endogenous technology choice. Each firm chooses an investment in R&D to decrease its marginal cost. We prove that the equilibrium R&D investment increases with market size (a larger population or trade) only if the price-elasticity of demand is an increasing function. Together with the output levels, such equilibrium investments may be socially excessive or insufficient, depending on whether the elasticity of the subutility is increasing or decreasing. The main implication is that opening up to free trade can foster R&D through variable mark-ups.",
keywords = "Monopolistic competition, R&D investments, Trade and efficiency, Trade gains, Variable mark-ups, ELASTICITY, TRADE, IMPACT, PRODUCTIVITY",
author = "Igor Bykadorov and Sergey Kokovin",
note = "Publisher Copyright: {\textcopyright} 2017 University of Venice",
year = "2017",
month = dec,
day = "1",
doi = "10.1016/j.rie.2017.10.006",
language = "English",
volume = "71",
pages = "663--674",
journal = "Research in Economics",
issn = "1090-9443",
publisher = "Elsevier",
number = "4",

}

RIS

TY - JOUR

T1 - Can a larger market foster R&D under monopolistic competition with variable mark-ups?

AU - Bykadorov, Igor

AU - Kokovin, Sergey

N1 - Publisher Copyright: © 2017 University of Venice

PY - 2017/12/1

Y1 - 2017/12/1

N2 - We study monopolistic competition with symmetric directly additive preferences (generating variable mark-ups) and an endogenous technology choice. Each firm chooses an investment in R&D to decrease its marginal cost. We prove that the equilibrium R&D investment increases with market size (a larger population or trade) only if the price-elasticity of demand is an increasing function. Together with the output levels, such equilibrium investments may be socially excessive or insufficient, depending on whether the elasticity of the subutility is increasing or decreasing. The main implication is that opening up to free trade can foster R&D through variable mark-ups.

AB - We study monopolistic competition with symmetric directly additive preferences (generating variable mark-ups) and an endogenous technology choice. Each firm chooses an investment in R&D to decrease its marginal cost. We prove that the equilibrium R&D investment increases with market size (a larger population or trade) only if the price-elasticity of demand is an increasing function. Together with the output levels, such equilibrium investments may be socially excessive or insufficient, depending on whether the elasticity of the subutility is increasing or decreasing. The main implication is that opening up to free trade can foster R&D through variable mark-ups.

KW - Monopolistic competition

KW - R&D investments

KW - Trade and efficiency

KW - Trade gains

KW - Variable mark-ups

KW - ELASTICITY

KW - TRADE

KW - IMPACT

KW - PRODUCTIVITY

UR - http://www.scopus.com/inward/record.url?scp=85031704508&partnerID=8YFLogxK

U2 - 10.1016/j.rie.2017.10.006

DO - 10.1016/j.rie.2017.10.006

M3 - Article

AN - SCOPUS:85031704508

VL - 71

SP - 663

EP - 674

JO - Research in Economics

JF - Research in Economics

SN - 1090-9443

IS - 4

ER -

ID: 9866007