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‘Hybrid ’ competition, innovation outcomes and regulation: A duopoly model

Thomas LE TEXIER
Université de Rennes, CNRS, CREM – UMR 6211, France
thomas.letexier@univ-rennes1.fr
ORCID : 0000-0001-5234-011X

Ludovic RAGNI
Université Côte d ’ Azur, CNRS, GREDEG – UMR 7321, Nice, France
ORCID : 0000-0003-0132-726X


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Abstract : This paper presents a duopoly model in which a commercial organization and a community compete by providing digital products while being able to share their innovation outputs to develop their own activities. The commercial organization always benefits from either a ‘closed ’ or an ‘open ’ institutional regime shift. Our numerical analysis evidences that the ‘closed ’ shift provides the best levels of innovation and welfare whereas it is not found to be profit-improving when product differentiation is small. This result partially qualifies the conventional idea according to which public policies may be designed to defend commercial interests rather than public ones.

Keywords : firm, community, closed innovation, open innovation, appropriation.

JEL Classification : D43, L13, L86.

DOI: https://doi.org/10.18559/RIELF.2020.1.10