Sequencing R&D decisions in a two-period duopoly with spillovers

We compare simultaneous versus sequential moves in R&D decisions within an asymmetric R&D/Cournot model with linear demand (for differentiated product s), general R&D costs, and spillovers. Simultaneous play and sequential pla y (with and without a specified leader) can emerge as appropriate formulati ons, depending on the ratios of spillover rate over demand cross-slope, but not on R&D efficiency. When at least one ratio is above 1/2, a sequential solution mitigates competition and leads to higher profits for each firm, a nd to higher social welfare. When uniquely specified, the stronger firm eme rges as the R&D first-mover.