Competition and Product Cycles with Non-Diversifiable Risk

Palokangas, T. (2006). Competition and Product Cycles with Non-Diversifiable Risk. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-06-027

[thumbnail of IR-06-027.pdf]

Download (212kB) | Preview


This paper analyzes the growth effects of competition in a product-cycle model where R&D firms both innovate and imitate and households are subject to non-diversifiable risk. I prove that product market competition promotes growth when the initial level of competition is high enough. In contrast to the earlier product-cycle models with diversifiable risk, I show also the following. Some positive profits are necessary for technological change. The larger the proportion of industries subject to price competition, the slower economic growth.

Item Type: Monograph (IIASA Interim Report)
Research Programs: Dynamic Systems (DYN)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:39
Last Modified: 27 Aug 2021 17:19

Actions (login required)

View Item View Item