| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 1142241 | Operations Research Letters | 2015 | 4 Pages |
Abstract
We investigate the R&D portfolio of a monopolist investing in cost-reducing and quality enhancing R&D. Incentives along the two directions are inversely related to the size of market demand, and independent of each other. The stability analysis shows the existence of a unique stable steady state equilibrium, which is a saddle point. Finally, we show that the monopolist undersupplies product quality as compared to the social optimum, while its investment in the abatement of marginal cost is socially efficient.
Related Topics
Physical Sciences and Engineering
Mathematics
Discrete Mathematics and Combinatorics
Authors
Luca Lambertini, Raimondello Orsini,