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Hikaru Ogawa and Ming Hsin Lin
''Cost reducing incentives in a mixed duopoly market''
( 2005, Vol. 12 No.6 )
This note studies the cost-reducing incentives in a mixed duopoly market. The result shows that while a profit-maximizing private firm carries out the cost-reducing investment, a social welfare-maximizing firm does not have an incentive to reduce its costs as long as the market share of the private firm is sufficiently large.
Keywords: cost-reducing innovation
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
L3 - Nonprofit Organizations and Public Enterprise: General
Manuscript Received : Nov 25 2004 Manuscript Accepted : Jan 26 2005

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