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Competition, Innovation And Increasing Returns

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  • M. Amendola
  • J. -L. Gaffard
  • P. Musso

Abstract

When firms enjoy increasing returns in presence of a high rate of innovation, competition may obtain due to the continuous changes in demand and cost conditions even when there is no differentiation and the products of competing firms are essentially homogeneous. In this paper we intend to provide theoretical structure to this conjecture, and to confirm it by carrying out a simulation analysis in the case of two firms competing on the market.

Suggested Citation

  • M. Amendola & J. -L. Gaffard & P. Musso, 2000. "Competition, Innovation And Increasing Returns," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 149-181.
    • Handle: RePEc:taf:ecinnt:v:9:y:2000:i:2:p:149-181
    DOI: 10.1080/10438590000000007
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    References listed on IDEAS

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    1. Mario Amendola & Jean-Luc Gaffard, 1988. "The innovative choice. An economic analysis of the dynamics of technology," Post-Print halshs-00420361, HAL.
    2. Mario Calderini & Stan Metcalfe, 1998. "Compound Learning, Neural Nets And The Competitive Process," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(4), pages 271-302.
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    Cited by:

    1. Jean-Luc Gaffard & Michel Quéré, 2007. "What’s the aim for competition policy: Optimizing market structure or encouraging innovative behaviors?," Springer Books, in: Uwe Cantner & Franco Malerba (ed.), Innovation, Industrial Dynamics and Structural Transformation, pages 393-405, Springer.
    2. Jean-Luc Gaffard & Jackie Krafft, 2001. "Telecommunications: understanding the dynamics of the organization of the industry," Post-Print hal-00203655, HAL.
    3. Jean-Luc Gaffard, 2009. "Innovation, competition, and growth: Schumpeterian ideas within a Hicksian framework," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 7-23, Springer.

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