Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/85685 
Authors: 
Year of Publication: 
2000
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 00-010/2
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
I model optimal product-market competition policy when industriesdiffer inthe potential for quality-improving technological advance. In a two-periodmodel, a competition authority with limited resources administers adeterrence-based competition policy toward two industries. In one oftheindustries, an incumbent firm chooses the level of resources toinvest in aquality-improving R&D project. In the other industry, product qualityisconstant. The competition authority cannot commit in advance to thetoughness of competition policy in the post-discovery world. Optimalpolicy requires the competition authority to administer a toughercompetition policy before innovation, all else equal, the greater thepotential quality improvement; patent protection may increase R&Dintensity, but worsens market performance.
Document Type: 
Working Paper

Files in This Item:
File
Size
1.75 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.