Changes

==Reference(s)==

*Lee, T. and L.L. Wilde (1980), "Market structure and innovation: A reformulation", Quarterly Journal of Economics, 94, pp. 429-436. [http://www.edegan.com/pdfs/Lee%20Wilde%20(1980)%20-%20Market%20structure%20and%20innovation%20A%20reformulation.pdf (pdf)]

iv. When there are initial increasing returns to scale in the R & D technology, competitive entry leads to more than the socially optimal number of firms in the industry.

It turns out that conclusions (i) and (ii) are sensitive to Loury's specification of the costs of R & D. In this paper we investigate the effects of an alternative specification.