Process and product R&D by a multiproduct monopolist: a reply to Lin

Author: Luca Lambertini

Source: Oxford Economic Papers, Volume 56, Number 4, October 2004 , pp. 745-749(5)

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Abstract:

With reference to Lambertini (2003), Lin correctly points out that, if R&D efforts for process innovation are endogenous, then process and product R&D are strategic complements. Then, he also proves that the opposite holds when spillovers are nil. Objecting to Lin's second claim, I show that monopoly profits are everywhere increasing in the extent of information sharing within the firm. Consequently, the full internalisation of spillovers restores the complementarity between process R&D and product proliferation.

Document Type: Research article

DOI: http://dx.doi.org/10.1093/oep/gpf066

Publication date: 2004-10-01

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Oxford Economic Papers is a general economics journal, publishing refereed papers in economic theory, applied economics, econometrics, economic development, economic history, and the history of economic thought. It occasionally publishes survey articles in addition to original papers. Books are not reviewed, but substantial review articles are considered. The journal occasionally publishes survey articles in addition to original papers, and occasionally publishes special issues or symposia.