The long-run dynamics of product and process innovations for a multi-product monopolist

Journal of Economic Dynamics and Control

2014

Self Cite

This paper proposes a reduced form model of dynamic duopoly in the context of heterogeneous innovations framework. Two agents invest into product and process innovations simultaneously. Every newly introduced product has its own dimension of process-improving innovations and there is a continuum of possible new products. In the area of process innovations the costless imitation effect is modelled while in the area of product innovations agents are cooperating with each other. As a result the specialization of innovative activity is observed. This specialization arises from strategic interactions of agents in both fields of innovative activity and is endogenously defined from the dynamics of the model.

Section: Assumptionsmentioning

confidence: 99%

“…With infinite time horizon the problem of process innovations management is the time-autonomous one and hence the time of the products emergence does not influence the value generation process and can be normalized for all products to zero, (Bondarev 2010b).…”

Section: Decomposition Of the Problemmentioning

confidence: 99%

Endogenous specialization of heterogeneous innovative activities of firms under the technological spillovers

Journal of Economic Dynamics and Control

2014

Self Cite

“…This can be found in the Appendix. It is equivalent to the HJB problem for homogeneous products in Bondarev (2012).…”

Section: Horizontal Innovationsmentioning

confidence: 99%

“…The setup of the R&D sector resembles the structure used in optimal control models dealing with an endogenously determined domain of heterogeneity, developed mainly in Belyakov et al (2011) and it is close to the homogeneous version of the multi-product monopolist in Bondarev (2012). Horizontal and vertical innovations are interrelated, with profitability of vertical innovations being the stimulus for inventing new technologies and the scope of horizontal innovations limiting the speed of vertical innovations.…”

Section: Introductionmentioning

confidence: 99%

Endogenous Growth and Structural Change Through Vertical and Horizontal Innovations

Greiner

2017

Macroecon. Dynam.

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This paper combines horizontal and vertical innovations to build an endogenous growth model that allows for structural change. Older technologies are continuously replaced by newer ones due to creative destruction and new technologies appear as a result of horizontal innovations and as a result of consumers' preferences for variety. We assume fixed operational costs for the manufacturing sector and an endogenously determined price of the patent for each new technology. The duration of a patent is not limited but every industry is profitable only for a certain period of time, thus making the effective time of existence of the technology endogenous and finite. We demonstrate that such an economy exhibits constant growth rates that are proportional to the average productivity growth, despite the ongoing disappearance of older technologies from the industry.JEL classification: O31, O34, O41

“…The dynamic model follows the lines of (Belyakov, Tsachev, and Veliov 2011), where the mathematical foundations for this type of models are discussed, but is more closely to the stylized model in (Bondarev 2012). The R&D spending is determined from an optimization problem of maximizing the productivity of all new technologies subject to laws of motion of productivity increase for each technology and and subject to the process of variety expansion of technologies.…”

Section: The Dynamics Of Randd Investmentsmentioning

confidence: 99%

The Role of R&D with a Continuum of Technologies and Environmental Degradation: An Optimal Control Approach

Greiner

2013

SSRN Journal

In this paper we develop an economic growth model that includes anthropogenic climate change. We explicitly include a research sector that creates new technologies and simultaneously expands productivities of existing technologies. The environment is affected by R&D activities both negatively, through increase of output from productivity growth, as well as positively, as new technologies are less harmful for the environment. We consider three different versions of the model. In the first version, there are no constraints with respect to research spending, while the R&D sector affects the rest of the economy. In this version, the environmental damages are lower than in the model with simple exogenous technical change. Next, we consider the research dynamics with a constant R&D budget set by the agent. We find that there exist two different steady states of this economy, one with higher productivities and less new technologies being developed, and the other with more technologies being created. In the last version, finally, we allow for dynamic R&D spending. For this version, it is demonstrated that sustained economic growth with preservation of the environment is possible given certain conditions as regards the technology and R&D spending.