Does AMD spur Intel to innovate more?
Abstractpresent. Counterfactuals reveal that consumer surplus can actually increase as the market moves toward monopoly, which suggests policymakers ought to consider the dynamic trade-off of lower current consumer surplus from higher prices for higher future surplus from more innovation. Comparative statics reveal that competition does induce higher innovation if consumers have sufficiently high preferences for quality and low price sensitivity.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 151.
Date of creation: 2010
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