Abstract

Innovation is the major instigator in competitive industry. The competition forinnovation is traditionally analyzed within the framework of deterministic andstochastic models (Reinganum, 1989). Boone (2001), Fethke and Birch (1982) have respectively analyzed the standard models of competitive strategies in a duopoly and oligopoly industry. By focusing our analysis on deterministic models that is, the models without technological uncertainty, this paper attempts to interpret the model of Boone (2001) in order to determine the choice of positioning in a context of cumulative innovation. Thus, taking into account the case of the telecommunications’ sector in Senegal, we try to understand the motivations of the incumbent firm (called first mover) to implement cumulative innovation in order to maintain its position in spite of the investments of entering firms (called follower).

Key words: Innovation, competition, deterministic models, telecommunications industry, Oligopoly.