Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/159392 
Year of Publication: 
2005
Series/Report no.: 
Quaderni - Working Paper DSE No. 551
Publisher: 
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna
Abstract: 
We model the optimal behaviour of a multiproduct monopolist investing both in process and in product innovation in a dynamic setting. Product innovation reduces the degree of substitutability between any two varieties. First, we find that R&D efforts increase in both directions as the number of varieties grows. Second, we characterise the relative intensity of R&D activities according to the reservation price and the interaction between the number of varieties and the degree of product differentiation. Finally, we show the existence of complementarity within the R&D portfolio, i.e., decreasing marginal production cost prompts for an analogous reduction of product substitutability, and conversely
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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