Competition in product design: An experiment exploring innovation behavior

Uwe Cantner (), Werner Güth (), Andreas Nicklisch and Torsten Weiland
Additional contact information
Andreas Nicklisch: Max Planck Institute for Research on Collective Goods, Bonn, Germany

No 2007-014, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: We experimentally investigate competition in innovation in a patent race scenario. Pairs of subjects compete as seller firms on a duopoly market, engaging in risky search investments. Successful innovation is rewarded through temporary monopoly rents. Throughout the interaction, subjects receive feedback on own and other's search success and profit margin. Partitioning subjects into subgroups of investor types reveals that the majority of subjects condition investments on the degree of competition as measured by sales shares, while for others no correlation is ascertained. Heterogeneity in individual risk attitudes and differing experiences with related search tasks may explain this finding.

Keywords: innovation; competition; imitation; patent race (search for similar items in EconPapers)
JEL-codes: D81 L11 O31 (search for similar items in EconPapers)
Date: 2007-05-07
New Economics Papers: this item is included in nep-cbe, nep-com, nep-exp, nep-ino, nep-ipr, nep-pr~, nep-mic, nep-mkt and nep-tid
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Related works:
Journal Article: COMPETITION IN PRODUCT DESIGN: AN EXPERIMENT EXPLORING INNOVATION BEHAVIOR (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-014

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