Competition in product design: an experiment exploring innovation behavior

Arbeitspapier

We experimentally investigate competition in innovation in a patent race scenario. Pairs of subjects compete as seller firms on a duopoly market, engaging in risky search investments. Successful innovation is rewarded through temporary monopoly rents. Throughout the interaction, subjects receive feedback on own and other’s search success and profit margin. Partitioning subjects into subgroups of investor types reveals that the majority of subjects condition investments on the degree of competition as measured by sales shares, while for others no correlation is ascertained. Heterogeneity in individual risk attitudes and differing experiences with related search tasks may explain this finding.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Jena Economic Research Papers ; No. 2007,014

Classification and Topics

• Classification: Wirtschaft ; Criteria for Decision-Making under Risk and Uncertainty ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Innovation and Invention: Processes and Incentives
• Subject: innovation ; competition ; imitation ; patent race ; Innovation ; Innovationswettbewerb ; Imitationswettbewerb ; Duopol ; Produktdesign ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cantner, Uwe ; Güth, Werner ; Nicklisch, Andreas ; Weiland, Torsten
• Event: Veröffentlichung
• (who): Friedrich Schiller University Jena and Max Planck Institute of Economics
• (where): Jena
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/25588
• Last update: 10.03.2025, 11:43 AM CET