| Summary: | 碩士 === 東吳大學 === 經濟學系 === 94 === The purpose of this paper is to compare the equilibrium prices and quantities of two firms when they have different network externalities and different goodwill, respectively. Different from Chou and Chen(2005), this study explores the effects of the variations in network externalities and goodwill on the optimal timing for R&D investment. In addition, numerical simulation approach is employed to analyze the variations of equilibrium.
On the consideration of network externality, the determination of R&D timing is associated with whether the difference in qualities between new-tech and old-tech products is bigger than R&D cost when two firms have different network externalities. On the other hand, the firm will determine to invest R&D in the first-period when two firms have the same network externality and the difference in qualities between the two products is not too small. Furthermore, regardless of network externalities, the firm will determine to invest R&D in the second-period when the difference in qualities between new-tech and old-tech products is very small.
On the consideration of goodwill, the firm will determine to invest R&D in the first-period when the difference in qualities between new-tech and old-tech products is less than R&D cost if its goodwill is worse than competitor. When the firm’s goodwill is worse than its competitor and both firms’ network externalities are small, then the determination of R&D timing is associated with whether the difference in qualities between new-tech and old-tech products is bigger than R&D cost. On the other hand, the firm will determine to invest R&D in the first-period when two firms’ goodwill is big.
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