Process and product innovation in a vertically differentiated monopoly
نویسندگان
چکیده
We analyse product and process innovations in a monopoly model with vertical differentiation. The incentive towards both kinds of innovation is always larger under social planning than under monopoly. Therefore, the comparison between the two regimes’ welfare performance should account for the possibility that the planner and the monopolist adopt different technologies and supply different product ranges. 2000 Elsevier Science S.A. All rights reserved.
منابع مشابه
Tying and entry deterrence in vertically differentiated markets∗
This paper analyzes tying and bundling as entry deterrence tools. It shows that a multi-product firm can defend its monopoly position in one market via mixed bundling even without having a dominant position in another market. Such a strategy, however, leads to welfare losses and cannot be prevented by cooperation or a merger among rivals. This is shown in a model with two complementary goods. E...
متن کاملProcess and Product Innovation in a Vertically Differentiated Industry
We examine a vertically differentiated duopoly where firms invest in process and product innovation and then compete in prices under full market coverage. We show that (i) process and product innovation are complements (substitutes) for the low-quality (high-quality) firm; (ii) the firm which is initially more efficient invests more than the rival in process innovation; (iii) if the initial dif...
متن کاملThe Impact of an Integrated Marketing and Manufacturing Innovation
Suppose you are a Marketing Manager envisioning a new product, or an Operations Manager contemplating a process improvement, or a CEO who commissioned an integrated new product development team. If our assumptions hold, our model offers you a single numerical measure, called the degree of product/process innovation, to determine your initiative’s impact on potential sales, prices, market segmen...
متن کاملCompetitive Nonlinear Pricing and Contract Variety∗
We analyze markets with both horizontally and vertically differentiated products under both monopoly and duopoly. In the base model with two consumer types, we identify conditions under which entry prompts an incumbent to expand or contract its low end of the product line. Our analysis offers a novel explanation for the widespread use of “fighting brands” and “product line pruning.” We also ext...
متن کاملLicensing of a Drastic Innovation with Product Differentiation
We analyze the licensing of a drastic innovation when products are differentiated due to consumer and/or product heterogeneity. We show that an industry insider prefers to divest its production arm and license the new technology as an industry outsider, in which case it can replicate multiproduct monopoly profits. We derive the optimal contracts and the optimal number of licenses by assuming a ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2000