The impact of competition on unilateral incentives to innovate

Nadja Trhal

No 20, Working Paper Series in Economics from University of Cologne, Department of Economics

Abstract: We investigate the impact of the degree of competition in a Cournot market on one firm's unilateral incentives to invest in R&D. Applying comparative static analyses we get different predictions depending on the magnitude of the innovation efficiency parameter alpha. Even inner solutions arose. For alpha->1 the comparative statics predicate that incentives to invest in R&D are strongest in a monopoly whereas for smaller alpha the optimal market structure for unilateral innovation varies depending on the cost level.

Keywords: innovation incentives; market structure; Cournot competition (search for similar items in EconPapers)
JEL-codes: D4 L1 O31 (search for similar items in EconPapers)
Date: 2005-08-29
New Economics Papers: this item is included in nep-com, nep-ino and nep-mic
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