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Technological leadership and persistence of monopoly under endogenous entry: static versus dynamic analysis
- 1.0355291 - NHU-C 2011 RIV NL eng J - Journal Article
Kováč, E. - Vinogradov, V. - Žigić, Krešimir
Technological leadership and persistence of monopoly under endogenous entry: static versus dynamic analysis.
Journal of Economic Dynamics & Control. Roč. 34, č. 8 (2010), s. 1421-1441. ISSN 0165-1889. E-ISSN 1879-1743
R&D Projects: GA MŠMT LC542
Institutional research plan: CEZ:MSM0021620846
Keywords : dynamic oligopoly * persistence of monopoly * strategic predation
Subject RIV: AH - Economics
Impact factor: 1.117, year: 2010
We build a dynamic oligopoly model with endogenous entry in which a particular firm (leader) invests in an innovation process, facing the subsequent entry of other firms (followers). We identify conditions that make it optimal for the leader in the initial oligopoly situation to undertake pre-emptive R&D investment (strategic predation) eventually resulting in the elimination of all followers. Compared to a static model, the dynamic one provides new insights into the leader's intertemporal investment choice, its optimal decision making, and the dynamics of the market structure over time. We also contrast the leader's investment decisions with those of the social planner.
Permanent Link: http://hdl.handle.net/11104/0194100
Number of the records: 1