Technology Strategy and Product Diversity

Abstract

This paper considers a three-stage game of a differentiated oligopoly: firms first make their entry decisions, then they choose production technologies and in the third stage of the game they decide product prices. The technology choice can be understood as selecting a technology from a pool of recently available technologies as well as developing a new technology by innovative activities. The market equilibrium outcome is then compared with the social optimum.Market Structure, Ologopolies, Research and Development