Get 20M+ Full-Text Papers For Less Than $1.50/day. Subscribe now for You or Your Team.

Learn More →

Durable‐Goods Monopoly with Endogenous Innovation

Durable‐Goods Monopoly with Endogenous Innovation While selling an existing product, a durable‐goods monopolist may develop a new, improved product. The firm must consider the interaction between its intertemporal pricing and research and development (R&D) decisions. The interactions show a sharp dichotomy depending on pricing regimes. When it is optimal for the firm to continue to sell the old model along with the new model, the interactions disappear. However, when it is optimal for the firm to discontinue the sale of the old model after introducing the new model, the firm will face a time‐inconsistency problem in its R&D decision. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economics & Management Strategy Wiley

Durable‐Goods Monopoly with Endogenous Innovation

Journal of Economics & Management Strategy , Volume 13 (2) – Jun 1, 2004

Loading next page...
 
/lp/wiley/durable-goods-monopoly-with-endogenous-innovation-PeRp6K6ZJ4

References (20)

Publisher
Wiley
Copyright
Copyright © 2004 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1058-6407
eISSN
1530-9134
DOI
10.1111/j.1530-9134.2004.00012.x
Publisher site
See Article on Publisher Site

Abstract

While selling an existing product, a durable‐goods monopolist may develop a new, improved product. The firm must consider the interaction between its intertemporal pricing and research and development (R&D) decisions. The interactions show a sharp dichotomy depending on pricing regimes. When it is optimal for the firm to continue to sell the old model along with the new model, the interactions disappear. However, when it is optimal for the firm to discontinue the sale of the old model after introducing the new model, the firm will face a time‐inconsistency problem in its R&D decision.

Journal

Journal of Economics & Management StrategyWiley

Published: Jun 1, 2004

There are no references for this article.