Complementarity between Product and Process innovation in a Monopoly Setting

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We study complementarity between product and process innovation in a monopoly setting. First we consider the possibility for the firm to alternatively invest only along one of the two directions and compare the incentives of process vs product innovation. Then we allow the firm to invest simultaneously in both activities, showing that both investment levels as well as the profit are higher than in case of individual investment. Product and process innovations are then complementary and the firm always prefers a simultaneous adoption.

Date: 2005
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-ino and nep-mic
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Journal Article: Complementarity between product and process innovation in a monopoly setting (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:533

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