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PROCESS AND PRODUCT INNOVATION IN A VERTICALLY DIFFERENTIATED INDUSTRY

机译:垂直差异化行业中的过程和产品创新

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摘要

We examine a vertically differentiated duopoly where firms invest in process and product innovation and then compete in prices under full market coverage. We show that (i) process innovation fosters (hinders) product innovation for the low-quality (high-quality) firm; (ii) the firm which is initially more efficient invests more than the rival in process innovation; (iii) if the initial differential between marginal costs is sufficiently high, the demand for the less efficient firm is nil and the duopoly equilibrium does not exist.
机译:我们考察了纵向差异化的双头垄断,即企业在过程和产品创新上进行投资,然后在完全市场覆盖下竞争价格。我们表明:(i)过程创新促进了(低)低质量(高质量)公司的产品创新; (ii)最初效率更高的公司在流程创新方面的投入要超过竞争对手; (iii)如果边际成本之间的初始差异足够高,则对效率较低的公司的需求为零,并且不存在双头垄断均衡。

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