Adoption of Product and Process Innovations in Differentiated
AbstractThe paper examines the effects of the degree of competition on the firms' decision to innovate in differentiated markets. We find that a low (high) degree of product differentiation (competition) weakly supports the introduction of new products. Firms' weakly favour a process innovation if the degree of product differentiation (competition) is high (low). In addition, assumptions on the strategic complementarity of product and process innovations and on the decreasing returns of a product innovation are found to be the critical assumptions in the sense of Milgrom and Roberts (1994).
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0212002.
Date of creation: 12 Dec 2002
Date of revision:
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Product innovation; process innovation; differentiated markets; Bertrand competition; Cournot competition;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-17 (All new papers)
- NEP-COM-2002-12-17 (Industrial Competition)
- NEP-IND-2002-12-17 (Industrial Organization)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Andrea Mantovani, 2006.
"Complementarity between product and process innovation in a monopoly setting,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 15(3), pages 219-234.
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- Christopher Snyder, 2003.
"Introduction to the 2003 International Industrial Organization Conference Special Issue,"
Review of Industrial Organization,
Springer, vol. 23(3), pages 175-177, December.
- Christopher M. Snyder, 2003. "Introduction to the 2003 International Industrial Organization Conference Special Issue," Review of Industrial Organization, Springer, vol. 23(3_4), pages 175-177, December.
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