Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Thursday, September 21, 2017

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

F. Delbono ; L. Lambertini investigate 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 fi rms 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.

https://lawprofessors.typepad.com/antitrustprof_blog/2017/09/innovation-and-product-market-concentration-schumpeter-arrow-and-the-inverted-u-shape-curve.html

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