The Effect of R&D on Deterring Entry under Asymmetric Information

• Main Authors: Pei-Shan Yen, 顏佩珊
• Other Authors: Yi-Heng Chen
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/29233715761012862601

碩士 === 淡江大學 === 產業經濟學系碩士班 === 100 === Based on Creane and Miyagiwa (2009), this paper builds up a simple duopoly model under perfect and asymmetric information on production costs. We want to find that the effect of R&D on deterring entry when R&D strategy incurs cost. We find that R&D is not an effectively entry-deterring strategy. Both in perfect and asymmetric information, if the incumbent adopts R&D strategy, it will accommodate the entrant to obtain a higher profit. Also, when the incumbent has high production cost, using R&D and accommodating new entrant will be a better strategy both in perfect and asymmetric information. However, when the incumbent has low cost, giving up R&D to stay being monopoly will be the best choice in perfect information situation. While in asymmetric information, the incumbent should give up R&D and stay in monopoly when its production cost is at the middle level, and should choose R&D and accommodate entrant when its production cost is at the very low level.