Sunk costs, market structure, and growth

• 成果类型: Article
• 署名作者: Peretto, PF
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.2307/2527316
• 发表日期: 1996
• 页码: 895-923
• 关键词: competition; INNOVATION; MODEL

摘要

I present a model of endogenous innovation where firms undertake in-house research and development (R&D). The concentration of sales and R&D resources determines the scale and efficiency of R&D operations and rate of productivity growth. In zero-profit equilibrium, R&D expenditure is one component of total fixed costs and determines the number of active firms. This feedback generates interdependent pricing, investment, and entry/exit decisions. The (jointly determined) rate of growth and number of firms supported in general equilibrium define the economy's balanced growth path. Multiple equilibria exist, and firms' expectations about rivalry determine the economy's performance.