Durable Goods, Market Structure and the Incentives to Innovate
AbstractA commonly-cited finding in the innovation literature is that a monopoly tends to innovate too little. This paper demonstrates that a monopoly may devote more resources to innovation than is socially optimal if it produces a durable good. This possibility occurs because durability creates new innovation incentives. Once an initial stock of a durable good has been produced, the monopoly faces a residual demand for the good. Innovation may allow the monopoly to more profitably exploit this residual demand, and this ability may lead the monopoly to devote more resources to innovation than is socially optimal. Copyright 1987 by The Review of Economic Studies Limited.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 54 (1987)
Issue (Month): 213 (February)
Contact details of provider:
Postal: Houghton Street, London WC2A 2AE
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gregory Goering & Michael Pippenger, 2003. "Dynamic consistency and monopoly," Atlantic Economic Journal, International Atlantic Economic Society, vol. 31(2), pages 188-194, June.
- Jong-Hee Hahn & Jin-Hyuk Kim, 2012. "Monopoly R&D and Compatibility Decisions in Network Industries," Working papers 2012rwp-43, Yonsei University, Yonsei Economics Research Institute.
- Usategui Díaz de Otalora, José María, 2001. "Commitment Power in a Non-Stationary Durable-Good Market," BILTOKI 2001-08, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
- Usategui Díaz de Otalora, José María, 2006. "Non-Stationary Demand in a Durable Goods Monopoly," DFAEII Working Papers 2006-05, University of the Basque Country - Department of Foundations of Economic Analysis II.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.