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Incentives to innovate in oligopolies

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  • BELLEFLAME, Paul
  • VERGARI, Cecilia

Abstract

In 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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Suggested Citation

  • BELLEFLAME, Paul & VERGARI, Cecilia, 2011. "Incentives to innovate in oligopolies," LIDAM Reprints CORE 2325, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2325
    DOI: 10.1111/j.1467-9957.2009.02131.x
    Note: In : The Manchester School, 79(1), 6-28, 2011
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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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