Innovation and product market concentration: Schumpeter, arrow, and the inverted U-shape curve

Beyond Schumpeter vs. Arrow: How Antitrust Fosters Innovation

Competition and Innovation: An Inverted-U Relationship

This paper investigates the relationship between product market competition (PMC) and innovation. A growth model is developed in which competition may increase the incremental profit from innovating; on the other hand, competition may also reduce innovation incentives for laggards. There are four key predictions. First, the relationship between product market competition (PMC) and innovation is...

R&D for green technologies in a dynamic oligopoly: Schumpeter, arrow and inverted-U's

We extend a well known differential oligopoly game to encompass the possibility for production to generate a negative environmental externality, regulated through Pigouvian taxation and price caps. We show that, if the price cap is set so as to fix the tolerable maximum amount of emissions, the resulting equilibrium investment in green R&D is indeed concave in the structure of the industry. Our...

Competition and Innovation: The Inverted-U Relationship Revisited

I re-examine the inverted-U relationship between competition and innovation (originally modeled and tested by Aghion et al. [2005]) by using data from publicly traded manufacturing …rms in the US. I control for the possible endogeneity of competition by using various measures of foreign competition as instruments. I …nd a positive relationship between competition (as measured by the inverse of ...

Income Inequality and Happiness: An Inverted U-Shaped Curve

Numerous studies agree that income inequality, rather than absolute income, is an important predictor of happiness. However, its specific role has been controversial. We argue that income inequality and happiness should exhibit an inverted U-shaped relationship due to the dynamic competing process between two effects: when income inequality is relatively low, the signal effect will be the domin...