Perfectly competitive innovation

Perfectly Competitive Innovation

We construct a competitive model of innovation and growth under constant returns to scale. Previous models of growth under constant cannot model technological innovation. Current models of endogenous innovation rely on the interplay between increasing returns and monopolistic markets. In fact, established wisdom claims monopoly power to be instrumental for innovation and sees the non-rivalrous ...

Values of Perfectly Competitive Economies

Profit Maximization in Perfectly Competitive Markets

EBITA (earnings before interest, taxes, and amortization of intangible assets) has increased at a compound annual rate of 26%. The Class A Common Stock price has grown in value at a compound annual rate of 27%. By effectively implementing our strategies and delivering value, we have achieved one of the strongest growth records in the publishing industry. How does a firm's optimal output choice ...

Perfectly Competitive Bilateral Exchange Without Discounting∗

In a random-matching economy of traders who maximize cumulative consumption (overtaking criterion), the stationary, Markov, Bayesian-perfect equilibrium is studied. At such equilibrium, two results hold: (1) perfect substitutability between current and future consumption implies a no-surplus condition; and (2) by the no-surplus condition, there is a nominal price at which all trades must occur....

Robustness of perfectly competitive equilibria to memory in imitative learning

We extend the analysis in Alós-Ferrer and Ania (2005) to allow for memory in the imitative learning process. Adding memory allows to detect and correct unprofitable deviations and makes it harder to disturb Nash equilibria with spiteful deviations that achieve a relative advantage. We show for the case of general aggregative submodular games that perfectly competitive outcomes are still stochas...