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Product market competition policy and technological performance


  • Stephen Martin

    (Institute of Economics, University of Copenhagen)


Stricter competition policy reduces expected payoffs before and after innovation, but reduces pre-innovation payoffs relatively more than post-innovation payoffs, and therefore increases the equilibrium level of R&D activity: tough product-market competition policy stimulates innovation. There is an inverted-U relationship between competition policy and expected welfare. The model also permits analysis of the effect of R&D spillovers and of alternative R&D cooperation regimes on expected welfare, on R&D efforts, and on the expected time to discovery of a cost-saving innovation.

Suggested Citation

  • Stephen Martin, 1998. "Product market competition policy and technological performance," CIE Discussion Papers 1998-01, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  • Handle: RePEc:kud:kuieci:1998-01

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    References listed on IDEAS

    1. Martin, Stephen, 1996. "R & D joint ventures and tacit product market collusion," European Journal of Political Economy, Elsevier, vol. 11(4), pages 733-741, April.
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    Cited by:

    1. Stephen Martin*, 2001. "Competition Policy for High Technology Industries," Journal of Industry, Competition and Trade, Springer, vol. 1(4), pages 441-465, December.
    2. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.

    More about this item


    antitrust; innovation;

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • 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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