Gilbert.

• Position: Relation between market structure and innovation incentives - Brief Article

The effect of market structure on innovation incentives has been a controversial subject in economics since Joseph Schumpeter advanced the theory that competitive markets are not necessarily the most effective organizations to promote innovation. The incentive to innovate is the difference in profits before and after innovation occurs. The concept is straightforward, yet differences in market structure, the characteristics of innovations, and the dynamics of discovery leads to seemingly endless variations in the theoretical relationship between competition and expenditures on research and development or the outputs of R and D. Gilbert surveys the economic theory of innovation, focusing on horizontal...