Technology Strategy And Product Diversity
AbstractThis paper considers a three-stage game of a differentiated oligopoly: firms first make their entry decisions, then they choose production technologies and in the third stage of the game they decide product prices. The technology choice can be understood as selecting one from a pool of those recently available as well as developing a new technology through innovative activities. The resulting market equilibrium is then compared with the social optimum. The main conclusions are that a monopolistically competitive market will typically undersupply both product variety and production scale. R&D competition in a free entry differentiated oligopoly will lead to insufficient R&D investment at firm and industry levels.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.
Volume (Year): 7 (1998)
Issue (Month): 2 ()
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Other versions of this item:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
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