PRODUCT INNOVATION, PRISONER’S DILEMMAAND WELFARE

It is usually believed that innovation increases profits of the firms and alsosocial welfare. In a duopoly model with product innovation, we show that both thesebelieve may go wrong. We show that if the cost of innovation is not very large,prisoner’s dilemma occurs under product innovation, i.e., each firm earns lower profitwhen all the firms do innovation compared to the situation when neither firm doesinnovation...

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Year of publication:	2005-06-01
Authors:	Mukherjee, Arijit
Institutions:	University <Nottingham> / Department of Economics
Published in:	The University of Nottingham / School of Economics - discussion papers Discussion PaperNo. 05/06
Subject:	Produktinnovation \| product innovation \| Gefangenendilemma \| Wohlfahrt \| Welfarism \| Lizenz \| license \| Dyopol

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Extent:	133120 bytes 15 p. application/pdf
Type of publication:	Book / Working Paper
Language:	English
ISSN:	1360-2438
Classification:	D21 - Firm Behavior ; D43 - Oligopoly and Other Forms of Market Imperfection ; Market research ; Product policy ; Individual Reports, Studies ; No country specification
Source:	USB Cologne (business full texts)