Incentives to innovate in oligopolies

Paul Belleflamme () and Cecilia Vergari ()

No 2006014, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: 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.

Keywords: innovation; proÞt incentive; oligopoly; product dierentiation. (search for similar items in EconPapers)
JEL-codes: L13 O31 (search for similar items in EconPapers)
Date: 2006-02-01
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Working Paper: Incentives to innovate in oligopolies (2006)
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