Innovation and product market concentration: Schumpeter, arrow, and the inverted U-shape curve
Abstract We investigate the relationship between market concentration and industry innovative effort within a familiar two-stage model of R&D race in which firms compete à la Cournot in the product market. With the help of numerical simulations, we show that such a setting is rich enough to gene...
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Veröffentlicht in: | Oxford economic papers 2022-01, Vol.74 (1), p.297-311 |
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Hauptverfasser: | , |
Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | Abstract
We investigate the relationship between market concentration and industry innovative effort within a familiar two-stage model of R&D race in which firms compete à la Cournot in the product market. With the help of numerical simulations, we show that such a setting is rich enough to generate Arrovian, Schumpeterian, and inverted U curves. We interpret these different patterns on the basis of the relative strength of the technological incentive and the strategic incentive. We then bridge our theoretical results and some recent empirical research. |
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ISSN: | 0030-7653 1464-3812 |
DOI: | 10.1093/oep/gpaa044 |