Multi-project R&D competition with free-entry

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2 Citations (Scopus)


We consider a model of innovation where firms are allowed to invest in several projects. It is shown that free-entry, in the absence of start-up costs, leads to an equilibrium with one project per firm. The presenceof start-up costs reintroduces the rationale for parallelprojects undertaken by each firm. In this case, free-entry implies that all adjustment to changes in the gains to innovation occur through the number of firms in the market, with projects per firm remaining constant.

Original languageEnglish
Pages (from-to)309-318
Number of pages10
JournalEconomics of Innovation and New Technology
Issue number4
Publication statusPublished - 1 Jan 1993


  • competition free entry
  • R&D


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