Competition and innovation: An experimental investigation

Arbeitspapier

The paper analyzes the effects of more intense competition on firms' incentives to invest in process innovations. We carry out experiments based on two-stage games, where R&D investment choices are followed by product market competition. As predicted by theory, an increase in the number of firms from two to four reduces investments. However, a positive effect is observed for a switch from Cournot to Bertrand, even though theory predicts a negative effect in the four-player case.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 0807

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Group Behavior ; Oligopoly and Other Imperfect Markets ; Innovation and Invention: Processes and Incentives
• Subject: R&D investment ; intensity of competition ; experiment ; Innovation ; Investition ; Wettbewerbsstrategie ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sacco, Dario ; Schmutzler, Armin
• Event: Veröffentlichung
• (who): University of Zurich, Socioeconomic Institute
• (where): Zurich
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/76230
• Last update: 10.03.2025, 11:43 AM CET