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 a` 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.

Flavio Delbono, Luca Lambertini (2022). Innovation and product market concentration: Schumpeter, arrow,and the inverted U-shape curve. OXFORD ECONOMIC PAPERS, 74(1), 297-311 [10.1093/oep/gpaa044].

Innovation and product market concentration: Schumpeter, arrow,and the inverted U-shape curve

Flavio Delbono;Luca Lambertini
2022

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 a` 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.
2022
Flavio Delbono, Luca Lambertini (2022). Innovation and product market concentration: Schumpeter, arrow,and the inverted U-shape curve. OXFORD ECONOMIC PAPERS, 74(1), 297-311 [10.1093/oep/gpaa044].
Flavio Delbono; Luca Lambertini
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/831079
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