Process and product innovation: A differential game approach to product life cycle
We investigate the timing of adoption of product and process innovation by using a differential game in which firms may invest in both activities. We consider horizontal product innovation that reduces product substitutability, and process innovation that reduces marginal cost. First, we demonstrate that the incentive for cost-reducing investment is relatively higher than the incentive to increase product differentiation. Second, depending on initial conditions, (i) firms activate both types of investment from the very outset to the steady state; (ii) firms initially invest only in one R&D activity and then reach the steady state either carrying out only such activity or carrying out both; (iii) firms do not invest at all in either type of innovation.
(This abstract was borrowed from another version of this item.)
If 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.
Volume (Year): 6 (2010)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=1742-7355|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=1742-7355|
References listed on IDEAS
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.:
- Rosenkranz, Stephanie, 2003. "Simultaneous choice of process and product innovation when consumers have a preference for product variety," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 183-201, February.
- Cellini, Roberto & Lambertini, Luca, 1998. "A Dynamic Model of Differentiated Oligopoly with Capital Accumulation," Journal of Economic Theory, Elsevier, vol. 83(1), pages 145-155, November.
- d'Aspremont, Claude & Jacquemin, Alexis, 1988.
"Cooperative and Noncooperative R&D in Duopoly with Spillovers,"
American Economic Review,
American Economic Association, vol. 78(5), pages 1133-37, December.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis, . "Cooperative and noncooperative R&D in duopoly with spillovers," CORE Discussion Papers RP 823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Lambertini, Luca & Orsini, Raimondello, 2000.
"Process and product innovation in a vertically differentiated monopoly,"
Elsevier, vol. 68(3), pages 333-337, September.
- L. Lambertini & R. Orsini, 2000. "Process and Product Innovation in a Vertically Differentiated Monopoly," Working Papers 367, Dipartimento Scienze Economiche, Universita' di Bologna.
- Harrington Jr. , Joseph E., 1995. "Experimentation and Learning in a Differentiated-Products Duopoly," Journal of Economic Theory, Elsevier, vol. 66(1), pages 275-288, June.
- Lambertini, Luca & Poddar, Sougata & Sasaki, Dan, 1998.
"Standardization and the stability of collusion,"
Elsevier, vol. 58(3), pages 303-310, March.
- LAMBERTINI, Luca & PODDAR, Sougata & SASAKI, Dan, . "Standardization and the stability of collusion," CORE Discussion Papers RP 1325, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Luca Lambertini & Sougata Poddar & Dan Sasaki, 1997. "Standardization and the Stability of Collusion," CIE Discussion Papers 1997-14, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- L. Lambertini & S. Poddar & D. Sasaki, 1997. "Standardization and the Stability of Collusion," Working Papers 298, Dipartimento Scienze Economiche, Universita' di Bologna.
- Spence, Michael, 1976. "Product Differentiation and Welfare," American Economic Review, American Economic Association, vol. 66(2), pages 407-14, May.
- Doraszelski, Ulrich, 2004. "Innovations, improvements, and the optimal adoption of new technologies," Journal of Economic Dynamics and Control, Elsevier, vol. 28(7), pages 1461-1480, April.
- Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
- Filson, Darren, 2002.
"Product and process innovations in the life cycle of an industry,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 49(1), pages 97-112, September.
- Darren Filson, . "Product and Process Innovations in the Life Cycle of an Industry," Claremont Colleges Working Papers 2000-30, Claremont Colleges.
- Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
- Cellini, Roberto & Lambertini, Luca, 2002. "A differential game approach to investment in product differentiation," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 51-62, November.
When requesting a correction, please mention this item's handle: RePEc:bla:ijethy:v:6:y:2010:i:2:p:227-252. See general information about how to correct material in RePEc.
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.