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| Pedro Mendi |
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| ''Competitive pressure and innovation in vertically differentiated markets'' |
| ( 2015, Vol. 35 No.4 ) |
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| This paper analyzes the innovation incentives for a firm that produces a vertically differentiated product, in the presence of a competitive fringe that produces a lower-quality product. I find that the relationship between innovation incentives and competition, measured by the difference in quality levels may exhibit an inverted-U-shaped pattern. |
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| Keywords: Vertical differentiation, innovation, competitive pressure |
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
O3 - Technological Change; Research and Development: General |
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| Manuscript Received : Aug 18 2014 | | Manuscript Accepted : Nov 20 2015 |
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