Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/38635 
Year of Publication: 
2004
Series/Report no.: 
CSIO Working Paper No. 0063
Publisher: 
Northwestern University, Center for the Study of Industrial Organization (CSIO), Evanston, IL
Abstract: 
We study the e.ects of antitrust policy in industries with continual innovation. A more protective antitrust policy may have conflicting e.ects on innovation incentives, raising the profits of new entrants, but lowering those of continuing incumbents. We show that the direction of the net e.ect can be determined by analyzing shifts in innovation benefit and supply holding the innovation rate fixed. We apply this framework to analyze several specific antitrust policies. We show that in some cases, holding the innovation rate fixed, as suggested by our comparative statics results, the tension does not arise and a more protective policy necessarily raises the rate of innovation.
Document Type: 
Working Paper

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