Pehr-Johan Norbäck and Joacim Tåg
The relationship between entrepreneurs and established companies in the innovation industry is complex. Early in the innovation process entrepreneurs compete with large established companies in R&D. Later in the process, entrepreneurial companies enter the product market, or they become attractive candidates for established companies who are competing to buy the incumbents. Knowledge of how competition laws affect the efficiency of this type of markets is limited. In particular, competition laws not only affect the intensity of competition between the incumbents, but also between the established companies and the entrepreneurs. In addition, the competition laws also affect the value of using innovations, both for established firms and entrepreneurs. In order to design and implement competition laws in R&D intensive industries, a better understanding of these effects would be of great value.
The purpose of this project is to theoretically and empirically study how the design and implementation of competition laws affects the efficiency and welfare in markets where established firms face competition from entrepreneurs.