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Competition policy for innovative industries

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The topic is of competition policy for innovative markets is of central importance to innovation in the USA, and many firms and their representatives are taking part in discussions about it. A central question motivates the discussion: do large firms with market power deserve special anti-trust scrutiny in markets characterized by robust innovative activity? Recent thinking distinguishes between environments where intellectual property protection is effective and where it is not. Traditional analysis too narrowly frames policy issues for this setting. It is more fruitful to think about how competition policy works through two mechanisms, viz. (i) by altering entry conditions, and (ii) the bargaining terms between powerful incumbents and innovative entrants.

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Micro, IEEE  (Volume:22 ,  Issue: 2 )