This paper concerns the operation of competition in the presence of a high rate of innovation and increasing returns. Given free competition there is likely to exist, in this case, a tendency towards what may be called ‘dynamic equilibrium’, a tendency, that is to say, for the rate of investment in product development to rise or fall towards the level at which this investment yields only a normal return. Thus, competition, increasing returns and innovation may co-exist.
|Place of Publication||Frederiksberg|
|Publisher||DRUID - Danish Research Unit for Industrial Dynamics|
|Number of pages||35|
|Publication status||Published - 1996|
|Series||DRUID Working Paper|