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Heterogeneous product and process innovations for a multi-product monopolist under finite life-cycles of production technologies

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  • Bondarev, Anton A.

Abstract

Current paper analyses the influence of the length of production technologies life-cycles on the relative intensity of investments of a multi-product monopolist into different types of innovations. This monopolist is developing new versions of the basic product continuously and simultaneously invests into the production technologies of all these new products. In the paper the finite character of these products' life-cycles is assumed. These finite life-cycles are treated for the purposes of the paper as patents which are granted to the monopolist for the production and upgrading of every new product he/she introduces into the market. It is demonstrated that under the condition of finite-time life-cycles of new products the monopolist prefers to invest into process innovations for already introduced products rather than introducing the new ones in relative measure. It is argued, that this is not the case under infinite life-cycles for all these products where the monopolist invests relatively the same amounts into both types of innovations.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38243.

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Date of creation: 20 Apr 2012
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Handle: RePEc:pra:mprapa:38243

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Related research

Keywords: Heterogeneous Innovations; Economic Dynamics; Multiproduct Monopoly; Product Life-cycle; Distributed Control;

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References

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  1. Luca Lambertini & Andrea Mantovani, 2010. "Process and product innovation: A differential game approach to product life cycle," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(2), pages 227-252.
  2. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, October.
  3. Anton Bondarev, 2010. "Product and Quality Innovations: An Optimal Control Approach," Working Papers 439, Bielefeld University, Center for Mathematical Economics.
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  7. Vincenzo Denicolo, 2002. "Sequential innovation and the patent-antitrust conflict," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 649-668, October.
  8. Anton Bondarev, 2012. "The long-run dynamics of product and process innovations for a multi-product monopolist," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(8), pages 775-799, November.
  9. Herbert Dawid & Alfred Greiner & Benteng Zou, 2008. "Optimal Foreign Investment Dynamics in the Presence of Technological Spillovers," CREA Discussion Paper Series 08-07, Center for Research in Economic Analysis, University of Luxembourg.
  10. Suzanne Scotchmer, 1996. "Protecting Early Innovators: Should Second-Generation Products Be Patentable?," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 322-331, Summer.
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  12. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
  13. Bondarev, Anton A., 2012. "Heterogeneous product and process innovations for a multi-product monopolist under finite life-cycles of production technologies," MPRA Paper 38243, University Library of Munich, Germany.
  14. Hopenhayn, Hugo A & Mitchell, Matthew F, 2001. "Innovation Variety and Patent Breadth," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 152-66, Spring.
  15. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  16. Luca Lambertini & Raimondello Orsini, 2001. "Network Externalities and the Overprovision of Quality by a Monopolist," Southern Economic Journal, Southern Economic Association, vol. 67(4), pages 969-982, April.
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Cited by:
  1. Bondarev, Anton A., 2012. "Heterogeneous product and process innovations for a multi-product monopolist under finite life-cycles of production technologies," MPRA Paper 38243, University Library of Munich, Germany.

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