Durable-goods monopoly with endogenous innovation

Research output: Contribution to journalArticlepeer-review

23 Citations (Scopus)


While selling an existing product, a durable-goods monopolist may develop a new, improved product. The firm must consider the interaction between its intertemporal pricing and research and development (R&D) decisions. The interactions show a sharp dichotomy depending on pricing regimes. When it is optimal for the firm to continue to sell the old model along with the new model, the interactions disappear. However, when it is optimal for the firm to discontinue the sale of the old model after introducing the new model, the firm will face a time-inconsistency problem in its R&D decision.

Original languageEnglish
Pages (from-to)303-319
Number of pages17
JournalJournal of Economics and Management Strategy
Issue number2
Publication statusPublished - 2004 Jun
Externally publishedYes

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation


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