Process and product innovation by a multiproduct monopolist: a dynamic approach

Lambertini, Luca ; Mantovani, Andrea (2005) Process and product innovation by a multiproduct monopolist: a dynamic approach. p. 18. DOI 10.6092/unibo/amsacta/1800.
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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
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Mantovani, Andrea
Keywords
product innovation, process innovation, complementarity
Subjects
DOI
Deposit date
16 Feb 2006
Last modified
17 Feb 2016 14:41
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