R&D strategic interaction with the labor-managed and profit-maximizing firms

This paper developes a two-stage game modelfor the duopoly competition marketcoexisted by a labor-managed firm(LMF) and a profit-maximizing firm(PMF),and analyzed their strategic interaction in output and RD investment.By establishing objective functions of LMF and PMF,it discusses their response curves of output and RD investment.Then it explores comparative static analysis for equilibrium output and RD investment.Finally it compares the LMF-PMF duopoly with LMF-LMF duopoly and PMF-PMF duopoly.It is shown that the output and RD investment of LMF differ from those of PMF greatly.Among three types of duopoly,the output and RD investment have no relation to the type of duopoly,but are related to the type of firm only.However,comparative static analysis for equilibrium output and RD investment are related to both the type of firm and the type of duopoly mostly.