Innovation by Entrants and Incumbents
---- Acknowledgments ----
We thank Sam Kortum, Erzo Luttmer, Ariel Pakes, and seminar participants at MIT and Toulouse
Network on Information Technology Conference at Seattle for useful comments. We are particularly grateful
to Xavier Gabaix for numerous useful suggestions at the early stages of this project. Financial support from
the Toulouse Network on Information Technology is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.