Does AMD Spur Intel to Innovate More?
We estimate an equilibrium model of dynamic oligopoly with durable goods and endogenous innovation to examine the effect of competition on innovation in the personal computer microprocessor industry. Firms make dynamic pricing and investment decisions while consumers make dynamic upgrade decisions,...
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| Veröffentlicht in: | The Journal of political economy 2011-12, Vol.119 (6), p.1141-1200 |
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| container_end_page | 1200 |
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| container_issue | 6 |
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| container_title | The Journal of political economy |
| container_volume | 119 |
| creator | Goettler, Ronald L. Gordon, Brett R. |
| description | We estimate an equilibrium model of dynamic oligopoly with durable goods and endogenous innovation to examine the effect of competition on innovation in the personal computer microprocessor industry. Firms make dynamic pricing and investment decisions while consumers make dynamic upgrade decisions, anticipating product improvements and price declines. Consistent with Schumpeter, we find that the rate of innovation in product quality would be 4.2 percent higher without AMD present, though higher prices would reduce consumer surplus by $12 billion per year. Comparative statics illustrate the role of product durability and provide implications of the model for other industries. |
| doi_str_mv | 10.1086/664615 |
| format | Article |
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| ispartof | The Journal of political economy, 2011-12, Vol.119 (6), p.1141-1200 |
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| language | eng |
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| source | University of Chicago Press Journals; JSTOR; EBSCOhost Business Source Complete |
| subjects | Business innovation Comparative economics Competition Computer industry Consumer equilibrium Consumer surplus Duopolies Economic competition Economic theory Electrical industries Electronics industry Equilibrium models Innovation Innovations Investment decision Microprocessors Monopoly Oligopoly Political economy Pricing Product innovation Product quality Studies Technological innovation U.S.A |
| title | Does AMD Spur Intel to Innovate More? |
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