S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Research Institute of Industrial Economics (IFN) Working Paper Series

No 867:
Acquisitions, Entry and Innovation in Oligopolistic Network Industries

Pehr-Johan Norbäck (), Lars Persson () and Joacim Tåg ()

Abstract: In industries with network effects, incumbents’ installed bases create barriers to entry that discourage entrepreneurs from developing new innovations. Yet, entry is not the only commercialization route for entrepreneurs. We show that the op- tion of selling to an incumbent increases the innovation incentives for entrepreneurs when the network effects are strong and incumbents compete to preemptively ac- quire innovations. Thus, we establish that network effects and installed bases do not necessarily restrict the innovation incentives, and that network effects promote acquisitions over entry.

Keywords: Acquisitions; Entry; Network effects; Innovation; R&D; (follow links to similar papers)

JEL-Codes: L10; L15; L26; L50; L86; O31; (follow links to similar papers)

37 pages, April 6, 2011, Revised November 30, 2016

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp867.pdf    PDF-file
Download Statistics
This paper is published as:
Norbäck, Pehr-Johan, Lars Persson and Joacim Tåg, (2014), 'Acquisitions, Entry and Innovation in Network Industries', International Journal of Industrial Organization, Vol. 37, November, pages 1-12



Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:iuiwop:0867 This page was generated on 2016-12-02 13:52:49