Preemptive acquisition and downgrading innovation

Ornella Tarola

Economics Bulletin, 2011, vol. 31, issue 2, 1520-1529

Abstract: Research papers on innovation activity share the view that whenever an invention is made available by a startup innovator, getting its ownership by acquisition is beneficial for incumbent firms. In this note, I show by means of an example that there are some circumstances in which accomodating entry and competing with the innovator in the product market can be substantially more profitable than blocking her entry via acquisition.

Keywords: INNOVATION; VERTICAL DIFFERENTIATION; NATURAL DUOPOLY (search for similar items in EconPapers)
JEL-codes: L0 (search for similar items in EconPapers)
Date: 2011-05-23
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P142.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-11-00295

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().