Chen, You-hua; Nie, Pu-yan; Wang, X. Henry - In: Economics Bulletin 33 (2013) 4, pp. 2648-2660
This paper studies the incentive by a single firm in a differentiated goods duopoly to engage in cost-reducing innovations and how this incentive is affected by the level of competition in the product market. It is found that a firm's innovation effort has a U-shaped relationship with the level...