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Process and product R&D by a multiproduct monopolist

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  • Ping Lin

Abstract

It is shown that the claim in Lambertini that a multiproduct monopolist's incentive for process R&D declines with the number of products it offers is incorrect. This incentive is in fact an increasing function of the number of products in his model. I further extend the model of Lambertini to show that whether or not process R&D incentive and the number of varieties are positively related depends on the degree of scope economies in process R&D. Product innovation promotes process R&D if the degree of such scope economies is high (as in Lambertini), and discourages it if the degree of scope economies is low. Copyright 2004, Oxford University Press.

Suggested Citation

  • Ping Lin, 2004. "Process and product R&D by a multiproduct monopolist," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 735-743, October.
    • Handle: RePEc:oup:oxecpp:v:56:y:2004:i:4:p:735-743
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    File URL: http://hdl.handle.net/10.1093/oep/gpf065
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