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The road not taken: competition and the R&D portfolio

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  • Igor Letina

Abstract

This article examines the effects of market structure on the variety of research projects undertaken and the amount of duplication of research. A characterization of the equilibrium market portfolio of R&D projects and the socially optimal portfolio is provided. It is shown that a merger decreases the variety of developed projects and decreases the amount of duplication of research. An increase in the intensity of competition among firms leads to an increase in the variety of developed projects and a decrease in the amount of duplication of research.

Suggested Citation

  • Igor Letina, 2013. "The road not taken: competition and the R&D portfolio," ECON - Working Papers 127, Department of Economics - University of Zurich, revised Aug 2015.
    • Handle: RePEc:zur:econwp:127
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    More about this item

    Keywords

    Innovation; competition; R&D portfolio; market structure;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • 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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