Competition among entrepreneurs

Daniel F. Spulber*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

12 Scopus citations

Abstract

I examine a three-stage model of Schumpeterian competition among entrepre-neurs.In the initial entry stage, entrepreneurs invest in innovation and establish firms. In the next stage, entrepreneurs choose prices strategically, make irrevers-ible investments, and compete to serve consumers, while faced with asymmetric information about each others' innovations. In the final creative destruction stage, firms with better technologies remain in the market while firms with inferior technologies exit the market. The model features strategic pricing by firms and the possibility of heterogeneous technologies remaining in the market. The model provides a necessary and sufficient condition for creative destruction.

Original languageEnglish (US)
Article numberdtp038
Pages (from-to)25-50
Number of pages26
JournalIndustrial and Corporate Change
Volume19
Issue number1
DOIs
StatePublished - Jul 17 2009

ASJC Scopus subject areas

  • Economics and Econometrics

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