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Too much R&D? - Vertical differentiation in a model of monopolistic competition

Author

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  • Jan Kranich

    (Leuphana Universität Lüneburg)

Abstract

This paper discusses a model of vertical an horizontal product differentiation within the Dixit-Stiglitz framework of monopolistic competition. Firns coompete not only in prices and horizontal attributes of their products, but also in the quality that can be controlled by R&D activities. Based upon te results of a general equilibrium model, intra-sectoral trade and the welfare implications of public intervention in terms of research promotion are considered. The analysis involves a numerical application to ten basic European industries.

Suggested Citation

  • Jan Kranich, 2007. "Too much R&D? - Vertical differentiation in a model of monopolistic competition," Working Paper Series in Economics 59, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:59
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    References listed on IDEAS

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    Cited by:

    1. Kranich, Jan, 2009. "The Formation of Urban Centers under R\&D and Spillover Externalities," Hannover Economic Papers (HEP) dp-430, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

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    More about this item

    Keywords

    R&D; Monopolisitc Competition; Product Differentiation;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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