Oligopoly with a Large Number of Competitors: Asymmetric Limit Result

We address how profitable innovation is in a competitive market by investigating the asymmetric oligopoly model in which 1 firm (innovator) has a cost advantage that is not drastic enough for her to become a monopolist, and by inducing asymmetric limit outcomes when the number of the other firms (la...

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Veröffentlicht in:	Economic theory 2009-05, Vol.39 (2), p.331-352
Hauptverfasser:	Ino, Hiroaki, Kawamori, Tomohiko
Format:	Artikel
Sprache:	eng
Schlagworte:	Business innovation Competition Competitiveness Cost efficiency Costs Economic models Economic theory Economic Theory/Quantitative Economics/Mathematical Methods Economics Economics and Finance Emerging technology Game Theory Games Hypotheses Infinity Innovation Innovations Inventors Marginal costs Market prices Microeconomics Monopolies Monopoly Nash equilibrium Oligopoly Public Finance Research Article Scholarships & fellowships Social and Behav. Sciences Social sciences Studies Technological innovation
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Beschreibung
Zusammenfassung:	We address how profitable innovation is in a competitive market by investigating the asymmetric oligopoly model in which 1 firm (innovator) has a cost advantage that is not drastic enough for her to become a monopolist, and by inducing asymmetric limit outcomes when the number of the other firms (laggard firms) goes to infinity. If the innovator is the Stackelberg leader, two cases can arise: (i) the innovator behaves as in the competitive market or (ii) she occupies the entire market but cannot make the price. If we consider Cournot competition, the innovator becomes the partial monopolist.
ISSN:	0938-2259 1432-0479
DOI:	10.1007/s00199-008-0344-x