Asymmetric Regulation and Incentives for Innovation
AbstractUnder asymmetric regulation, different firms in the same industry are subjected to different levels of regulatory restraint. We analyze the nature of innovation rivalry in such an industry, emphasizing that a rival may be able to inexpensively imitate an innovator's successful new technology. Although asymmetric regulation may slow the industry-wide pace of innovation, it does not necessarily do so. In fact, by weakening incentive to imitate, regulation may make an unregulated entrant's innovation profitable, thereby accelerating innovation. Conversely, giving the regulated firm incentives may backfire by producing either excessive or insufficient innovation; these negative outcomes are more likely the greater the cost-reducing potential offered by the new technology. Copyright 1995 by Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Industrial & Corporate Change.
Volume (Year): 4 (1995)
Issue (Month): 4 ()
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- James E. Prieger, 2005.
"Endogenous Regulatory Delay and the Timing of Product Innovation,"
54, University of California, Davis, Department of Economics.
- Prieger, James, 2005. "Endogenous Regulatory Delay and the Timing of Product Innovation," Working Papers 05-4, University of California at Davis, Department of Economics.
- Prieger, James, 2001.
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01-9, University of California at Davis, Department of Economics.
- James E. Prieger, 2003. "The Timing of Product Innovation and Regulatory Delay," Working Papers 19, University of California, Davis, Department of Economics.
- Prieger, James E., 2007. "Regulatory delay and the timing of product innovation," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 219-236, April.
- James Prieger, 2008. "Product innovation, signaling, and endogenous regulatory delay," Journal of Regulatory Economics, Springer, vol. 34(2), pages 95-118, October.
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