About the Roosevelt Institute The Roosevelt Institute is a think tank, a student network, and the nonprofit partner to the Franklin D. [...] Two Models of Innovation: Incentives and Abilities to Innovate The Innovation-as-Incentives approach suggests that innovation happens because innovators have incentives to work hard at a problem, that innovation is the product of incentive-oriented agents that try to stay ahead of their competitors, and that this same mechanism drives reductions in price and improvements in quality in competitive. [...] This triggers neoclassical antitrust’s “antibodies” to fight antitrust intervention: The court then homes in on the need to protect a firm’s ability to profit, and declares that innovation arguments favor non-intervention, rendering the firm immune to reforms that prioritize access to innovative capabilities. [...] Courts and enforcers must weigh this benefit against the harm of restricting access to the target’s capabilities by others in the marketplace, both at the time of acquisition and into the future. [...] In a merger context, antitrust has to balance between innovation benefits to the acquirer and innovation harms to the ecosystem.
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