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Competition and Increasing Returns

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Author Info

  • Mario Amendola

    ()
    (University of Roma La Sapienza)

  • Jean-Luc Gaffard

    ()
    (OFCE, SKEMA Business School)

Abstract

The paper demonstrates the compatibility between competition as a rivalry among firms and increasing returns resulting from innovative choice. The analysis offers the prospect of a general theory of economic evolution. It is carried out by means of a model, which makes it possible to exhibit the time structure of production processes and to sketch out the sequential interaction of decisions in a process of restructuring of productive capacities for the whole economy. It shows that several firms can coexist in the market, despite the existence of increasing returns, yet remain differentiated not so much because they supply differentiated goods, but because they are each one at a different stage of the life cycle of the production process.

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Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 234 (2014)
Issue (Month): 2-3 (April)
Pages: 257-273

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Handle: RePEc:jns:jbstat:v:234:y:2014:i:2-3:p:257-273

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Related research

Keywords: Competition; increasing returns; time to build; viability;

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  1. Hicks, John, 1989. "A Market Theory of Money," OUP Catalogue, Oxford University Press, number 9780198287247, September.
  2. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804, September.
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