The development of digital technologies has profoundly transformed the innovation activities of competitive enterprises. Therefore, it holds significant theoretical importance to integrate the essential characteristics of the digital economy, such as being driven by digitalization, network effects, and platform barriers, into the analytical framework of industrial economics, thus reexamining the relationship between competition and innovation.

RIDE aims to theoretically delineate the micro mechanisms governing competition when network effects are present, specifically characterizing the innovation dynamics between incumbents with market dominance and potential entrants within the digital economy. This will involve analyzing market equilibrium outcomes, estimating the endogenous determinants of market structure and innovation behavior under network effects, and assessing their impact on consumer surplus, firm profits, and social welfare. Based on these findings, RIDE will establish a qualitative and quantitative analytical framework. By utilizing various forms of big data, it will evaluate the impact of innovation policies and digital transformation on market structure, firm innovation, and total factor productivity