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Strategic Process And Product Innovation

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  • Harald Gruber

Abstract

The study analyzes the timing of process and product innovations. A dynamic product differentiation model illustrates strategic interaction in a duopoly. Firms use asymmetric equilibrium strategies for the adoption of innovations, i.e. innovations are adopted sequentially. The priority of process innovation over product innovation depends on the relative magnitude of the two innovations. Empirical evidence from the semiconductor industry illustrates asymmetric adoption patterns for innovations.

Suggested Citation

  • Harald Gruber, 1995. "Strategic Process And Product Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(1), pages 17-26.
    • Handle: RePEc:taf:ecinnt:v:4:y:1995:i:1:p:17-26
    DOI: 10.1080/10438599500000011
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    References listed on IDEAS

    as
    1. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
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    5. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908, Elsevier.
    6. Lunn, John E, 1986. "An Empirical Analysis of Process and Product Patenting: A Simultaneous Equation Framework," Journal of Industrial Economics, Wiley Blackwell, vol. 34(3), pages 319-330, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Product and process innovation; game theory; semiconductor industry J.E.L. classification: L19; 031;
    All these keywords.

    JEL classification:

    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other

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