Competitive Pressure and Innovation in Vertically Differentiated Markets

Pedro Mendi

No 03/2014, NCID Working Papers from Navarra Center for International Development, University of Navarra

Abstract: This paper analyzes the innovation incentives for a firm that produces a vertically differenciated product, in the presence that a competitive fringe that produces a lower-quality product. The author finds that the relationship between innovation incentives and competition, measured by the difference in quality levels may exhibit an inverted-U-shaped pattern.

Pages: 8 pages
Date: 2014-08
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http://ncid.unav.edu/download/file/fid/1160 (application/pdf)
http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I4-P232.pdf Link to published text

Related works:
Journal Article: Competitive pressure and innovation in vertically differentiated markets (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:nva:unnvaa:wp03-2014

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