Process R&D in monopoly under demand uncertainty

Lambertini, Luca (2004) Process R&D in monopoly under demand uncertainty. p. 9. DOI 10.6092/unibo/amsacta/1545.
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Abstract

I investigate R&D efforts for process innovation in a monopoly with uncertain demand. Two different models are proposed, where either (i) the reservation price is affected by an additive shock and the marginal production cost is increasing, or (ii) a multiplicative shock on the slope of demand combines with a flat marginal production cost. In either case, price-setting behaviour generates a larger R&D investment than quantity-setting behaviour. An Arrowian interpretation of the first result and a Schumpeterian interpretation of the second are proposed.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Keywords
technical progress, uncertainty
Subjects
DOI
Deposit date
15 Feb 2006
Last modified
17 Feb 2016 14:32
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