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The last shall be first: Innovation as a head-to-head race

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  • Arnold, Patrick
  • Möller, Marc
  • Roux, Catherine

Abstract

Uncertainty about the value of a contested innovation induces leaders and laggards to update their expectations in opposite directions. We characterize situations in which firms that have obtained an initial advantage are not the most likely to achieve final success. In spite of amplifying a leader’s advantage, greater contest intensity facilitates this effect, challenging the view that laggards require support to remain competitive.

Suggested Citation

  • Arnold, Patrick & Möller, Marc & Roux, Catherine, 2025. "The last shall be first: Innovation as a head-to-head race," Economics Letters, Elsevier, vol. 257(C).
    • Handle: RePEc:eee:ecolet:v:257:y:2025:i:c:s0165176525005312
    DOI: 10.1016/j.econlet.2025.112694
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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