Arbeitspapier
Is there a U-shaped Relation between competition and Investment?
We argue that, in a simple setting, the relation between the intensity of competition and cost-reducing investment is U-shaped. We consider a two-stage game with cost-reducing investments followed by a linear differentiated Cournot duopoly. We first show that, except for firms that are much less efficient than the competitor, investment in the subgame-perfect equilibrium is minimal for intermediate levels of competition, which is inversely parameterized by the extent of product differentiation. An extensive set of laboratory experiments also provides support for the U-shape, both for symmetric firms and for leaders. Also consistent with predictions, the relation is negative for firms that are lagging behind.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 0808
- Klassifikation
-
Wirtschaft
Design of Experiments: Laboratory, Group Behavior
Oligopoly and Other Imperfect Markets
Innovation and Invention: Processes and Incentives
- Thema
-
investment
intensity of competition
experiment
Investition
Wettbewerb
Marktstruktur
Oligopol
Test
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Sacco, Dario
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Zurich, Socioeconomic Institute
- (wo)
-
Zurich
- (wann)
-
2008
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Sacco, Dario
- University of Zurich, Socioeconomic Institute
Entstanden
- 2008
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