A PROSPECT THEORETICAL MODEL OF COMPETITION AND INNOVATION Cover Image

A PROSPECT THEORETICAL MODEL OF COMPETITION AND INNOVATION
A PROSPECT THEORETICAL MODEL OF COMPETITION AND INNOVATION

Author(s): Ondřej Krčál
Subject(s): Business Economy / Management, Evaluation research
Published by: Masarykova univerzita
Keywords: Innovation; Competition; Prospect Theory; Inverted-U Relationship;
Summary/Abstract: In this paper, we show that different profit expectations due to different intensity of competition influence innovation decisions of otherwise identical firms. Using prospect theoretical model of decision under uncertainty, we predict an inverted-U relationship between competition and innovation frequently observed in empirical studies.

  • Page Range: 250-257
  • Page Count: 8
  • Publication Year: 2010
  • Language: English