Process Innovation and Product Quality Improvement in a Dynamic Monopoly

Lambertini, Luca ; Orsini, Raimondello (2014) Process Innovation and Product Quality Improvement in a Dynamic Monopoly. Bologna: Dipartimento di Scienze economiche DSE, p. 19. DOI 10.6092/unibo/amsacta/3955. In: Quaderni - Working Paper DSE (926). ISSN 2282-6483.
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Abstract

We investigate the optimal R&D portfolio of a single-product monopolist investing in cost-reducing activities accompanied by efforts improving the quality of its product. There emerges that the firm’s relative incentives along the two directions are conditional upon market affluency, measured by consumers’ willingness to pay for quality, and R&D efforts are complements at equilibrium. We also perform the stability analysis, showing that a stable branch exists along the quality dimension only.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Orsini, Raimondello
Keywords
Optimal control; Monopoly; Product quality; R&D
Subjects
ISSN
2282-6483
DOI
Deposit date
18 Feb 2014 13:16
Last modified
31 Mar 2014 08:58
URI

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