Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-1149
Athey, Susan; Schmutzler, Armin (2001). Investment and market dominance. RAND Journal of Economics, 32(1):1-26.
View at publisher
We analyze a model of oligopolistic competition with ongoing investment. Special cases include incremental investment, patent races, learning by doing, and network externalities. We investigate circumstances under which a firm with low costs or high quality will extend its initial lead through investments. To this end, we derive a new comparative statics result for general games with strategic substitutes, which applies to our investment game. Finally, we highlight plausible countervailing effects that arise when investments of leaders are less effective than those of laggards, or in dynamic games when firms are sufficiently patient.
141 downloads since deposited on 11 Feb 2008
4 downloads since 12 months
|Item Type:||Journal Article, refereed|
|Communities & Collections:||03 Faculty of Economics > Department of Economics|
|Dewey Decimal Classification:||330 Economics|
|Deposited On:||11 Feb 2008 12:21|
|Last Modified:||05 Apr 2016 12:17|
Users (please log in): suggest update or correction for this item
Repository Staff Only: item control page