We examine a vertically differentiated duopoly where firms invest in process and product innovation and then compete in prices under full market coverage. We sh

The incentives to innovate for the incumbent and the entrant in a vertically differentiated market are analised, in the absence of uncertainty. It turns out tha

In contrast to Arrow's result for process innovations, we show that the gain from a product innovation can be larger to a secure monopolist than to a rivalrous

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