Is Competition Good for Innovation?

Investigates the relation between competition and innovation. The book provides a simple framework that helps to understand two issues: what are the sources of the ambiguous relation between competition and innovation, and which factors are conducive to a positive relation between competition and innovation?

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Is Competition Good for Innovation? investigates the relation between competition and innovation. It provides a simple framework that helps to understand two issues: what are the sources of the ambiguous relation between competition and innovation, and which factors are conducive to a positive relation between competition and innovation?

Chapter 2 identifies the first source of ambiguity between competition and innovation. In Chapter 3 the author reviews a simple framework that is general enough to contain the simple introductory examples and many familiar models from the literature as special cases. Chapter 4 considers several simple examples – the examples help to understand the different possible meanings of competition, that the effects of competition on innovation are ambiguous, and to identify the sources of ambiguities. Chapter 5 extends the analysis to deal with asymmetric firms. Chapter 6 treats various extensions of the simple framework that have received some attention in the literature. Chapter 7 moves towards the empirical literature and will also summarize a few contributions that have dealt with the relation between competition and innovation in laboratory experiments. Chapter 8 provides concluding remarks.