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Incentives to innovate in oligopolies

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Belleflamme, Paul [UCL] Vergari, Cecilia

In the spirit of Arrow (1962), we examine, in an oligopoly model with horizontally differentiated products, how much a firm is willing to pay for a process innovation that it would be the only one to use. We show that different measures of competition (number of firms, degree of product differentiation, Cournot vs Bertrand) affect incentives to innovate in non-monotonic, different, and potentially opposite ways.

Document type Document de travail (Working Paper)
Access type Accès libre
Publication date 2006
Collection ECON Discussion Papers - 2006/08, CORE Discussion Papers - 2006/14
Affiliation UCL - CORE - Center for Operations Research and Econometrics
Keywords Innovation ; Profit incentive ; Oligopoly ; Product differenciation
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Bibliographic reference Belleflamme, Paul ; Vergari, Cecilia. Incentives to innovate in oligopolies. ECON Discussion Papers ; 2006/08 (2006)
Permanent URL http://hdl.handle.net/2078.1/4468