| Publications [#42300] of Nataliya Kuribko
Working Papers
- N. Kuribko, Research vs. Development: Case of Durable Good
(work in progress)
(last updated on 2005/10/18)
Abstract: I incorporate the dual aspects of the
technological progress, a combination of
innovative activity and marginal
improvements, into firm’s decision over
developing a durable good. Those few
theoretical papers that considers this
aspect, take innovation process to be
deterministic. I relax this assumption by
allowing for stochastic innovation.
Contrary to deterministic case, I show that
the firm does not necessarily have an
incentive to invest at socially optimal
level. Furthermore, there exists a cost
structure for medium and high quality
range, for which the firm duplicates its
efforts by investing in both improvement
and innovation.
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