WP03/2014
Autor
N° Páginas
8
Publicado en
![](https://ncid.unav.edu/sites/default/files/styles/foto_wp_595/public/imagenes/wp/store-1245758_1280.jpg?itok=ergM94l0)
Competitive Pressure and Innovation in Vertically Differentiated Markets
Resumen
This paper analyzes the innovation incentives for a firm that produces a vertically differenciated product, in the presence that a competitive fringe that produces a lower-quality product. The author finds that the relationship between innovation incentives and competition, measured by the difference in quality levels may exhibit an inverted-U-shaped pattern.