Durable Goods, Market Structure and the Incentives to Innovate
Bibliographic Data
| ID | 9725872 |
|---|---|
| Authors | Eric W Bond (0000-0001-7028-1125), Larry Samuelson (0000-0002-2702-2555) |
| Year | 1987 |
| Volume | 54 |
| Issue | 213 |
| Pages | 57 |
| Publication date | 1987-02-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/2554343 |
| OpenAlex | W2066418635 |
| Language | EN |
| References cited | 3 |
A commonly-cited finding in the innovation literature is that a monopoly tends to innovate too little. This paper demonstrates that a monopoly may devote more resources to innovation than is socially optimal if it produces a durable good. This possibility occurs because durability creates new innovation incentives. Once an initial stock of a durable good has been produced, the monopoly faces a residual demand for the good. Innovation may allow the monopoly to more profitably exploit this residual demand, and this ability may lead the monopoly to devote more resources to innovation than is socially optimal. Copyright 1987 by The Review of Economic Studies Limited
Business · Commerce · Durable good · Economics · Incentive · Industrial organization · Microeconomics · Digital Platforms and Economics · Economic Growth and Productivity · Firm Innovation and Growth
| Citation velocity | historical |
|---|---|
| Highly cited | No |