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http://ssrn.com/abstract=1019224
 
 

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Competition in Product Design: An Experiment Exploring Innovation Behavior


Uwe Cantner


University of Jena - Economics Department

Werner Guth


Max Planck Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Andreas Nicklisch


Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Torsten Weiland


Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

May 7, 2007

Jena Economic Research Paper No. 2007-014

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.

Number of Pages in PDF File: 27

Keywords: innovation, competition, imitation, patent race

JEL Classification: D81, L11, O31

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Date posted: October 5, 2007 ; Last revised: September 3, 2013

Suggested Citation

Cantner, Uwe and Guth, Werner and Nicklisch, Andreas and Weiland, Torsten, Competition in Product Design: An Experiment Exploring Innovation Behavior (May 7, 2007). Jena Economic Research Paper No. 2007-014. Available at SSRN: http://ssrn.com/abstract=1019224 or http://dx.doi.org/10.2139/ssrn.1019224

Contact Information

Uwe Cantner (Contact Author)
University of Jena - Economics Department ( email )
Carl-Zeiss-Str. 3
07743 Jena
Germany
Werner Güth
Max Planck Institute of Economics ( email )
Kahlaische Strasse 10
D-07745 Jena, 07745
Germany
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Andreas Nicklisch
Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )
Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
49 228 9141679 (Phone)
49 228 9141655 (Fax)
HOME PAGE: http://www.coll.mpg.de/nicklisch.html

Torsten Weiland
Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )
Kahlaische Strasse 10
D-07745 Jena, 07745
Germany
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