Innovation by Leaders

Datos Bibliográficos

ID9706083
AutoresFederico Etro (0000-0002-7184-8696, NBER, autor de correspondencia)
Año2004
Volumen114
Número495
Páginas281-303
Fecha de publicación2004-04-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2004.00210.x
OpenAlexW3123707319
IdiomaEN
Citas recibidas13
Referencias citadas21

A new rationale for the persistence of monopolies is based on a precommitment of the incumbent monopolist to invest in R&D. In a patent race, as long as entry is free, the Arrow effect disappears: the incumbent has more incentives to invest than any outsider. Paradoxically, a market with some persistence of monopoly is competitive, while one with continuous leap-frogging must hide some barriers to entry. When the size of innovations is endogenous, leaders invest in more radical innovations. If there is a sequence of innovations, cycling investment emerges. Finally, I apply the idea to a general equilibrium model of Schumpeterian growth with persistence of monopoly

Arrow · Economics · Endogenous growth theory · Human capital · Incentive · Industrial organization · Investment (military · Leapfrogging · Market economy · Microeconomics · Monopolization · Monopoly · Neoclassical economics · Persistence (discontinuity · Precommitment · Economic Growth and Productivity · Economic theories and models · Innovation Diffusion and Forecasting