Competition, Innovation And Increasing Returns

M. Amendola, Jean-Luc Gaffard and Patrick Musso ()

Economics of Innovation and New Technology, 2000, vol. 9, issue 2, 149-181

Abstract: When firms enjoy increasing returns in presence of a high rate of innovation, competition may obtain due to the continuous changes in demand and cost conditions even when there is no differentiation and the products of competing firms are essentially homogeneous. In this paper we intend to provide theoretical structure to this conjecture, and to confirm it by carrying out a simulation analysis in the case of two firms competing on the market.

Keywords: competition; co-ordination; innovation; increasing returns (search for similar items in EconPapers)
Date: 2000
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DOI: 10.1080/10438590000000007

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