Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76230
Authors: 
Sacco, Dario
Schmutzler, Armin
Year of Publication: 
2008
Series/Report no.: 
Working Paper, Socioeconomic Institute, University of Zurich 0807
Abstract: 
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.
Subjects: 
R&D investment
intensity of competition
experiment
JEL: 
C92
L13
O31
Document Type: 
Working Paper

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