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Competition, Innovation and Increasing Returns

Author

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  • George B. Richardson

Abstract

This paper concerns the operation of competition in the presence of a high rate of innovation and increasing returns. Given free competition there is likely to exist, in this case, a tendency towards what may be called ‘dynamic equilibrium’, a tendency, that is to say, for the rate of investment in product development to rise or fall towards the level at which this investment yields only a normal return. Thus, competition, increasing returns and innovation may co-exist.

Suggested Citation

  • George B. Richardson, 1996. "Competition, Innovation and Increasing Returns," DRUID Working Papers 96-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:96-10
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    File URL: https://wp.druid.dk/wp/19960010.pdf
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    Citations

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    Cited by:

    1. Marco Valente, 2009. "Markets fo Heterogeneous Products: a Boundedly Rational Consumer Model," LEM Papers Series 2009/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Inge Ivarsson & Claes Göran Alvstam, 2004. "International Technology Transfer to Local Suppliers by Volvo Trucks in India," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 95(1), pages 27-43, February.
    3. Qiangyi Li & Lan Yang & Shuang Huang & Yangqing Liu & Chenyang Guo, 2023. "The Effects of Urban Sprawl on Electricity Consumption: Empirical Evidence from 283 Prefecture-Level Cities in China," Land, MDPI, vol. 12(8), pages 1-27, August.
    4. Dieter Ernst, 2001. "The Internet's Effects on Global Production Networks: Challenges and Opportunities for Managing in Developing Asia," Economics Study Area Working Papers 33, East-West Center, Economics Study Area.
    5. Lijing Tong & Ningyue Liu & Min Zhang & Liming Wang, 2018. "Employee Protection and Corporate Innovation: Empirical Evidence from China," Journal of Business Ethics, Springer, vol. 153(2), pages 569-589, December.
    6. John Mathews, 2001. "Competitive Interfirm Dynamics Within An Industrial Market System," Industry and Innovation, Taylor & Francis Journals, vol. 8(1), pages 79-107.

    More about this item

    Keywords

    Innovation; increasing returns; competition;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925

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