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Competition and Increasing Returns

Author

Listed:
  • Mario Amendola

    (UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome])

  • Jean-Luc Gaffard

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

The paper demonstrates the compatibility between competition as a rivalry among firms and increasing returns resulting from innovative choice. The analysis offers the prospect of a general theory of economic evolution. It is carried out by means of a model, which makes it possible to exhibit the time structure of production processes and to sketch out the sequential interaction of decisions in a process of restructuring of productive capacities for the whole economy. It shows that several firms can coexist in the market, despite the existence of increasing returns, yet remain differentiated not so much because they supply differentiated goods, but because they are each one at a different stage of the life cycle of the production process.

Suggested Citation

  • Mario Amendola & Jean-Luc Gaffard, 2014. "Competition and Increasing Returns," Post-Print hal-03399431, HAL.
  • Handle: RePEc:hal:journl:hal-03399431
    DOI: 10.1515/jbnst-2014-2-309
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    Cited by:

    1. is not listed on IDEAS
    2. Jean-Luc Gaffard, 2022. "Instabilité et résilience des économies de marché: Essai sur l'économie du libéralisme social," GREDEG Working Papers 2022-33, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.

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