In industries with network effects, incumbents’ installed bases create barriers to entry that discourage entrepreneurs … from developing new innovations. Yet, entry is not the only commercialization route for entrepreneurs. We show that the … necessarily restrict innovation incentives. We also show that network effects promote acquisitions over entry and that the …

for a variety of market structures, including markets with and without barriers to entry and markets characterized by … degree of product substitutability, with or without free entry, increases R&D effort – provided that the total market for …