When Market Competition Benefits Firms

摘要: A conventional wisdom in economics posits that more intense market competition, measured almost any way, reduces firm profit. In this paper, we challenge a simple Cournot model with strategic R&D investments wherein an efficient (dominant firm) competes against less firms (fringe firms). We find increase the number of fringe can stimulate by dominant firm, while it always each firms. More importantly, force be strong enough to compensate for loss arises from competition: firm's profit may indeed firms, quite contrary wisdom. An implication result is far-reaching, as gives help, rather than harm, competitors. relate practice know open knowledge disclosure, especially Ford's strategy disclosing its know-how publicly and extensively at beginning 20th century.