@article {IOPORT.05685530,
    author       = {Lee, Yao-Hsien and Chen, Hui-Chun and Kung, Sheu-Chin},
    title        = {Sticky prices, adjustment costs, and cost-reducing uncertainty in the presence of R\&D joint ventures.},
    year         = {2008},
    journal      = {International Journal of Information and Management Sciences},
    volume       = {19},
    number       = {4},
    issn         = {1017-1819},
    pages        = {691-716},
    publisher    = {Department of Management Sciences, Tamkang University, Tamsui},
    abstract     = {Summary: We attempt to fill the gap left by the earlier models by considering sticky prices and adjustment costs in a dynamic duopolistic competition model with cost reducion uncertainty. To be specific, an infinite horizon, two-player, linear-quadratic differential game model is formulated and analyzed. The players are firms that sell a homogeneous product in the same market. The players also conduct cooperative R\&D project and share the results of their R\&D efforts, so each can benefit from its research joint ventures (RJVs) in terms of cost reduction. Our results show that regardless of cost-reducing uncertainty, the firm's R\&D effort, R\&D knowledge accumulation, and output in the feedback Nash equilibrium are greater than in the open-loop Nash equilibrium. The more the sticky prices are, the lower the firm's R\&D effort level and R\&D knowledge accumulation will be. If cost-reducing uncertainty is not too large and the firm's risk aversion is not too strong, then RJVs in the open-loop Nash equilibrium and the feedback Nash equilibrium have anticompetitive effects.},
    identifier   = {05685530},
}