This paper explores the effects of innovation efficiency on technology gap and product diversity between a leading firm … and its competitor. Our analysis shows some interesting results: when innovation efficiency is sufficiently large and … firm will choose to reduce product diversity which intensifies price competition. We have also examined the role of …

This paper investigates the impact of technical progress on the relationship between competition an investment. Using a … model of oligopoly competition with di¤erentiated products where firms invest to reduce their marginal cost of production, I … competition that maximizes investment of the industry. This feature holds also for consumer surplus and Welfare. In the model …