Competition and product innovation in dynamic oligopoly

@article{Goettler2014CompetitionAP,
  title={Competition and product innovation in dynamic oligopoly},
  author={Ronald L. Goettler and Brett R. Gordon},
  journal={Quantitative Marketing and Economics},
  year={2014},
  volume={12},
  pages={1-42}
}
  • Ronald L. Goettler, Brett R. Gordon
  • Published 2014
  • Economics
  • Quantitative Marketing and Economics
  • We investigate the relationship between competition and innovation using a dynamic oligopoly model that endogenizes both the long-run innovation rate and market structure. We use the model to examine how various determinants of competition, such as product substitutability, entry costs, and innovation spillovers, affect firms’ equilibrium strategies for entry, exit, and investment in product quality. We find an inverted-U relationship between product substitutability and innovation: the returns… CONTINUE READING

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