Affiliation:
1. Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200052, P. R. China
2. School of Business Administration, South China University of Technology, Guangzhou 510632, P. R. China
Abstract
In this paper, we revisit a well-known differential game model to investigate the R&D activity for Greentech innovation in a duopoly market with network externality. In our study, firms carry out independent R&D or Cartel R&D for Greentech innovation which aims to reduce end-of-pipe emission and network externality effects play a role in the R&D activity via the inverse demand functions. Firms are concerned not only with their own profits, but also with the relative profits. At the steady-state equilibrium, the efforts for Greentech innovation under independent R&D are higher than that under Cartel R&D when the degree of altruism is higher than the degree of technological R&D spillover, and the network size under independent R&D is lower than that under Cartel R&D. Moreover, under a given market structure, whether profits under independent R&D are higher than under Cartel R&D depends on the initial network size, which means that at the initial moment firms can decide to undertake independent or Cartel R&D activities based on the initial network size.
Funder
Shanghai Philosophy and Social Science
Publisher
World Scientific Pub Co Pte Ltd