We construct and estimate a dynamic oligopoly model of the Bitcoin mining market. Mining equipment manufacturers produce differentiated durable capital goods and endogenously choose optimal investments in R&D. Miners make dynamic purchase decisions based partly on beliefs regarding...

We show that technology spillovers shift the composition of corporate research and development (R&D) by promoting innovation based on the exploitation of existing knowledge, while disincentivizing innovation that explores new areas and breaks new ground. Accordingly, firms facing large...