TY - CHAP
T1 - Coopting "decisive" technical advances
AU - Kamien, Morton I.
AU - Zang, Israel
PY - 2008
Y1 - 2008
N2 - The possibility of an established firm repelling a newcomer's cost reducing technical advances by providing the newcomer access to its currently superior technology, is explored. The oldtimer is supposed to offer his technology in return for the newcomer either ceasing R&D or sharing her findings. It is found that newcomers with the R&D potential to drive the oldtimer out of business cannot be coopted, but that less potent newcomers can. Whenever newcomers are deterred, the product price is higher and technical advance lower than it would be in the absence of a deal.
AB - The possibility of an established firm repelling a newcomer's cost reducing technical advances by providing the newcomer access to its currently superior technology, is explored. The oldtimer is supposed to offer his technology in return for the newcomer either ceasing R&D or sharing her findings. It is found that newcomers with the R&D potential to drive the oldtimer out of business cannot be coopted, but that less potent newcomers can. Whenever newcomers are deterred, the product price is higher and technical advance lower than it would be in the absence of a deal.
UR - http://www.scopus.com/inward/record.url?scp=84896292979&partnerID=8YFLogxK
U2 - 10.1016/S0573-8555(08)00206-X
DO - 10.1016/S0573-8555(08)00206-X
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AN - SCOPUS:84896292979
SN - 9780444532558
T3 - Contributions to Economic Analysis
SP - 113
EP - 128
BT - The Economics of Innovation
PB - Emerald Group Publishing Ltd.
ER -