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The Role of an Imitating Firm in a Dynamic Context

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  • Francisco Martínez-Sánchez

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Abstract

Resumen: se analizan los efectos de una empresa imitadora en el comportamiento de una empresa innovadora. La estructura del análisis usada es un modelo de duopolio dinámico de diferenciación de producto vertical, donde tanto el innovador como el imitador compiten simultáneamente en precio y calidad. Se obtiene, que cuando el mercado es pequeño, la presencia de un imitador estimula al innovador a aumentar su proceso de innovación, de modo que la entrada de un imitador no debería ser obstruida; y cuando el mercado es grande, el imitador reduce los incentivos del innovador a invertir sus recursos en I+D y a producir una mayor calidad, de modo que la entrada del imitador no debería ser fomentada.Abstract: We analyze the effects of an imitating firm on the behavior of the innovating firm. The framework of analysis used is a dynamic duopoly model of vertical product differentiation, where both the innovator and the imitator compete simultaneously in price and quality. We obtain that when the market is small, the presence of an imitator encourages the innovator to increase its innovating process, so the entry of the imitator should not be obstructed; and, when the market is large, the imitator reduces the innovator.s incentives to invest its economic resources in R&D and to provide a higher quality, so the entry of the imitator should not be encouraged.

Suggested Citation

  • Francisco Martínez-Sánchez, 2007. "The Role of an Imitating Firm in a Dynamic Context," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE, December.
  • Handle: RePEc:col:000174:004660
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    File URL: http://aprendeenlinea.udea.edu.co/revistas/index.php/lecturasdeeconomia/article/view/2027/1676
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
    2. Jaskold Gabszewicz, J. & Thisse, J. -F., 1980. "Entry (and exit) in a differentiated industry," Journal of Economic Theory, Elsevier, vol. 22(2), pages 327-338, April.
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    More about this item

    Keywords

    líder; imitador; calidad; diferenciación del producto y consumidor;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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