Summary
This book proposes shifting competition policy from price-centric to innovation-centric. It argues protecting innovation incentives and dynamic competition should be priorities over static prices, especially in high-tech industries.
Detailed Overview
The author first outlines how competition policy has traditionally focused on price rather than innovation. However, economic theory indicates innovation benefits consumers through new products and services. The book analyzes frameworks like Arrow’s replacement effect and Schumpeter’s views on competition and innovation. It also reviews empirical studies on competition, mergers, and innovation. The author finds current tools not optimized for high-tech industries characterized by network effects and cumulative innovation processes. Real-world examples of Microsoft and Google enforcement actions are examined. Recommendations are made for assessing innovation impacts of mergers, conduct, and standards. The openly accessible work aims to advance ongoing policy discussions as agencies regulate digital platforms.
Citation and Licensing
Gilbert, R. J. (2020). Innovation Matters: Competition Policy for the High-Technology Economy. The MIT Press. https://direct.mit.edu/books/oa-monograph/4844/Innovation-MattersCompetition-Policy-for-the-High. Open access under CC BY-NC-ND license. The license can be viewed here: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License .
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