Transport Price, Product Differentiation and R&D in an Oligopoly

Kanehara, Daishoku and Kamei, Keita (2019): Transport Price, Product Differentiation and R&D in an Oligopoly.

Abstract

This study incorporates transport price and endogenous product differentiation in an international oligopoly. Assuming endogenous determination of transport price based on the profit maximization of the transporter and using a three-stage game, we analyze the effect of the degree and difficulty of product differentiation on transport price. We show that both negatively affect the endogenous transport price. The intuition of this result comes from that the positive effect of a decrease in endogenous transport price on the demand for the differentiated products is greater than the negative effect on the price.

• Item Type: MPRA Paper
• Language: English
• Keywords: Endogenous Product Differentiation; International Trade; Oligopoly; Product R&D; Transport Price.
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change ; Industrial Price Indices; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development

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