Thursday, September 21, 2017
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.