Impact of Technical Progress on the Relationship Between Competition and Investment

IF 0.9 Q4 BUSINESS Journal of Industry Competition & Trade Pub Date : 2019-02-20 DOI:10.2139/ssrn.3047238

François Jeanjean

引用次数: 5

Abstract

This paper investigates the impact of technical progress on the relationship between competition and investment. Using a model of oligopolistic competition with differentiated products in which firms invest to reduce their marginal cost of production (or to improve quality), I find that technical progress, by increasing the size of innovation, defined as the drop in marginal costs (or the increase in quality) obtained for a given investment amount, increases total investment and decreases the level of competition that maximizes investment in the industry. This feature also holds for consumer surplus and welfare. This means that innovative industries maximize consumer surplus and welfare at a lower level of competitive pressure than do less innovative industries. In the model, competition is measured either by the number of competitors or by the degree of horizontal substitutability between offers. The results hold for both measures, subject to a relatively steady industry specific rate of technological change.

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技术进步对竞争与投资关系的影响

本文研究了技术进步对竞争与投资关系的影响。利用差异化产品的寡头垄断竞争模型，我发现技术进步，通过增加创新的规模，定义为边际成本的下降(或质量的提高)获得给定的投资金额，增加总投资，降低竞争水平，使投资最大化。这一特征也适用于消费者剩余和福利。这意味着创新产业在竞争压力水平较低的情况下，消费者剩余和福利最大化。在该模型中，竞争是通过竞争者的数量或报价之间的水平可替代性程度来衡量的。这两种方法的结果都成立，但受制于相对稳定的行业特定技术变化率。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Industry Competition & Trade BUSINESS-

CiteScore

3.10

自引率

5.30%

发文量

期刊介绍： The Journal of Industry, Competition and Trade (JICT) publishes research on the microeconomic foundations of industrial strategy, innovation, competition, and trade policy, concentrating on the functioning of markets for goods and services. The journal’s primary aim is to bridge the gaps between economic theory, empirical analysis and economic policy, and to provide a forum for applied theoretical research on policy questions. Journal of Industry, Competition and Trade promotes the combination of theories with facts, and encourages the incorporation of facts into model building. focuses on using applied theoretical research to arrive at policy conclusions, and encourages researchers to investigate policy questions. For example, game theoretical models that analyse the sources of and obstacles to innovation, the functioning of markets or strategic interactions are combined with empirical facts; and supporting empirical analysis is provided for models that explain how institutions, consumers and firms interact, how they shape their environment, and how incentives influence behaviour. Papers that analyse institutions and policy measures are expected to make explicit reference to theoretical models, while theoretical work is expected to include the analysis of empirical implications. The journal serves as a forum for dialogue between economists from academia and (national or international) policy circles. The composition of the Editorial Board, which includes academics as well as leading economists working at governmental and international organizations, facilitates exchanges between academia and economic policy. Officially cited as: J Ind Compet Trade

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