competition on R&D to the cost of innovation. The effect of competition on R&D is an inverted U-shape. However, the shape is … flatter and competition policy is therefore less relevant for innovation when innovations are relatively costly. Intuitively …, if innovations are costly for a firm, competitive shocks have to be significant to alter its innovation decisions …

other with probabilistic success. The market structure results from stochastic innovation and patent litigation. Depending … on the level of infringement fees, we highlight positive and negative effects of litigation threats on innovation. We …