A proposal for moving from price-centric to innovation-centric competition policy, reviewing theory and evidence on economic incentives for innovation. Competition policy and antitrust enforcement have traditionally focused on prices rather than innovation. Economic theory shows the ways that...

This paper describes a model of research and development investment in which firms can choose any number of R&D projects that have independent and identical probabilities of success. The measure of R&D diversity is the number of projects undertaken by the industry. Absent spillovers or profits...

We examine the effects of merger and merger policy on a potential entrant’s pre-merger investment incentives. We establish conditions under which the possibility of merger can induce an entrant to inefficiently imitate an incumbent’s product instead of innovating with a more differentiated...