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Publications [#285754] of Pietro F. Peretto

Journal Articles

  1. Peretto, PF, Firm size, rivalry and the extent of the market in endogenous technological change, European Economic Review, vol. 43 no. 9 (October, 1999), pp. 1747-1773, Elsevier BV [doi]
    (last updated on 2021/10/16)

    Abstract:
    Evidence shows that firms build their market position by accumulating knowledge protected by secrecy, patents and other appropriation devices. I explore the implications of this fact in a model economy where oligopolistic firms establish in-house R and D programs. In symmetric equilibrium, the number of firms determines concentration and firm size. These determine the scale and the efficiency of R and D operations and the rate of innovation. The number of firms, moreover, is endogenous and determined jointly with the rate of growth by the zero-profit condition. This property yields new results. For example, the scale effect of population size may be negative. The market allocation of resources is not Pareto optimal. I discuss the nature of this distortion.


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