Abstract
This paper analyses the economic efficiency of innovation under different market conditions within the context of a formal model that represents competitive innovation as the closed loop solution of a dynamic stochastic game in the spirit of Reinganum's analysis. It goes beyond Reingnaum's model in its explicit treatment of the product market (following Spence), which permits a consistent analysis of competitive innovation in the absence of patent protection. Efficiency is measured by the expected net present value of total surplus, and studies the effect on it of competitive structure, elasticity of demand, fixed costs, spillovers and subsidies.
Original language | English |
---|---|
Pages (from-to) | 52-65 |
Number of pages | 14 |
Journal | International Journal of Social Economics |
Volume | 23 |
Issue number | 2 |
DOIs | |
State | Published - 1 Jan 1996 |
ASJC Scopus subject areas
- Economics and Econometrics
- General Social Sciences