Essays on R&D-races and Cournot oligopoly

Abstract

This thesis was written out of the desire to gain a deeper understanding of competition in imperfect markets, in particular oligopolies. Firms have many possible strategies at their disposal that may effect present and future payoffs, and the structure of their markets. In the first two chapters we study R&D and innovation, that have received an ever increasing amount of interest, for a variety of market frameworks, including Cournot and Bertrand oligopoly, and repeated patent races. Here firms compete by innovating; we study how they do it, and in which direction competition will evolve. Still, many questions remain unanswered even in now classic static models of oligopoly, as the Cournot oligopoly, which he have used as a building block in the first two chapters. In chapter 3, we set out to examine the equally classical questions of existence and uniqueness of equilibrium, and the reaction of the market to the entry of new firms. Our analysis is innovative since it deals with heterogeneous goods and makes use of a very new set of methods.