Fabrizi, Simona; Lippert, Steffen; Norback, Pehr-Johan; … - Volkswirtschaftliche Fakultät, … - 2007
aggressive development of a basic innovation by better informed venture-backed firms is used as a signaling device to enhance the … sale price of the innovation. We then show that incumbents can undertake early, preemptive, acquisitions to prevent such … signaling driven overinvestment, despite the risk of buying a non-productive innovation. Therefore, to exist in equilibrium …
