Hoppe-Wewetzer, Heidrun C.; Lehmann-Grube, Ulrich - 2015
This paper explores a dynamic model of product innovation, extending the work of Dutta, Lach and Rustichini (1995). It is shown that if R&D costs for quality improvements are low, the dynamic competition is structured as a race for being the pioneer firm with payoff equalization in equilibrium,...