Process R&D in Monopoly under Demand Uncertainty

Lambertini, Luca (2004) Process R&D in Monopoly under Demand Uncertainty. Bologna: Dipartimento di Scienze economiche DSE, p. 7. DOI 10.6092/unibo/amsacta/4785. In: Quaderni - Working Paper DSE (507). ISSN 2282-6483.
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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
ISSN
2282-6483
DOI
Deposit date
04 Mar 2016 12:06
Last modified
04 Mar 2016 12:06
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