Our paper contributes to the literature on the relationship between innovation and market power by considering how changes in the intensity of product market competition affect innovation when managerial compensation is a linear function of firm profits. Changes in the intensity of product...

I find new results for the `Perpetual Race' analyzed in Horner 2004. The 'Perpetual Race' is an infinite horizon stochastic state space game for which Markov Perfect equilibria are characterized. My results characterize equilibrium strategy structure in a previously unexplored parameter region...