Incentives to innovate in oligopolies
AbstractIn the spirit of Arrow (1962), we examine, in an oligopoly model with horizontally differentiated products, how much a firm is willing to pay for a process innovation that it would be the only one to use. We show that different measures of competition (number of firms, degree of product differentiation, Cournot vs Bertrand) affect incentives to innovate in non-monotoic, different, and potentially ways.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2006008.
Date of creation: 01 Feb 2006
Date of revision:
innovation; profit incentive; oligopoly; product differentiation;
Other versions of this item:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-25 (All new papers)
- NEP-BEC-2006-03-25 (Business Economics)
- NEP-COM-2006-03-25 (Industrial Competition)
- NEP-IND-2006-03-25 (Industrial Organization)
- NEP-INO-2006-03-25 (Innovation)
- NEP-MIC-2006-03-25 (Microeconomics)
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