Abstract

SARMIENTO, Gloria Inés  and  BENAVIDES, Oscar Arturo. Investment in intangibles and competitive strategy: an extension of the Cournot model. Rev.econ.inst. [online]. 2017, vol.19, n.37, pp.85-114. ISSN 0124-5996.  https://doi.org/10.18601/01245996.v19n37.05.

The growing literature on intangible capital shows a relative consensus on the role of irms in terms of investing resources to acquire (purchase or produce) this type of capital because it allows them to obtain a competitive advantage. This paper explores the incentives of In increasing their level of intangible capital using a simple model in which the firms compete a la Cournot. The model shows that the firm can get higher price-cost margins and market share than its rivals even in perfect competition given that the firm is productive enough in the production of intangible capital.

Keywords : intangible capital, competitive strategy, market power; JEL: L11, L12, L21, O31.

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