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摘要
Innovation is an important topic in economics. This paper highlights duopoly innovation under the Hotel ling model with game theory approaches. This paper argues that market power, as measured by the cost advantage of a dominant firm over its rival, serves to enhance the incentive to innovate in a Hotel ling model of spatial competition. This result implies that a firm with cost advantage will have a larger incentive than its rivals to further its cost advantage as new opportunities for innovation arise thereby implying that innovation increases concentration. This result is in contrast to the result obtained by Holmes et al. (2012) who use the Betrand model to show that "market power" lowers the incentive to innovate. We think that the inelastic demand causes this economic phenomenon.
- 出版日期2013-12
- 单位暨南大学
