Lambertini, Luca ;
Mantovani, Andrea
(2005)
Process and product innovation by a multiproduct
monopolist: a dynamic approach.
p. 18.
DOI
10.6092/unibo/amsacta/1800.
Full text available as:
Abstract
We model the optimal behaviour of a multiproduct monopolist investing both
in process and in product innovation in a dynamic setting. Product innovation reduces
the degree of substitutability between any two varieties. First, we find that
R&D efforts increase in both directions as the number of varieties grows. Second,
we characterise the relative intensity of R&D activities according to the reservation
price and the interaction between the number of varieties and the degree of product
differentiation. Finally, we show the existence of complementarity within the
R&D portfolio, i.e., decreasing marginal production cost prompts for an analogous
reduction of product substitutability, and conversely.
Abstract
We model the optimal behaviour of a multiproduct monopolist investing both
in process and in product innovation in a dynamic setting. Product innovation reduces
the degree of substitutability between any two varieties. First, we find that
R&D efforts increase in both directions as the number of varieties grows. Second,
we characterise the relative intensity of R&D activities according to the reservation
price and the interaction between the number of varieties and the degree of product
differentiation. Finally, we show the existence of complementarity within the
R&D portfolio, i.e., decreasing marginal production cost prompts for an analogous
reduction of product substitutability, and conversely.
Document type
Monograph
(Working Paper)
Creators
Keywords
product innovation, process innovation, complementarity
Subjects
DOI
Deposit date
16 Feb 2006
Last modified
17 Feb 2016 14:41
URI
Other metadata
Document type
Monograph
(Working Paper)
Creators
Keywords
product innovation, process innovation, complementarity
Subjects
DOI
Deposit date
16 Feb 2006
Last modified
17 Feb 2016 14:41
URI
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