Technological innovations in the oligopolistic market: saving natural resources

Abstract

Innovative policies aimed at reducing the consumption of scarce or rare natural resources should take into account the interests of firms which use these resources in their activities. Firms as maximizers of their own well-being (profits) implement this or that change as soon as this change brings them more profit than the absence of such a change. In this paper we present a model of an infinite Nash competition and show which innovation strategy the firm chooses depending on such parameters as the number of firms on the market, the value of the discount factor, etc. The results of modeling are interesting from a practical point of view, since they predict the main trends of investments in fairly common situations.