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Time-to-Market in Vertically Differentiated IndustriesEmanuele BacchiegaUniversity of Bologna - Department of Economics Jean J. GabszewiczCatholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) Ornella TarolaUniversity of Lugano - Institute of Economic Research November 2004 CORE Discussion Paper No. 2004/77 Abstract: We study the introduction of new products in a vertically differentiated industry. Innovative firms have to engage into reducing time-to-market investments in order to shorten the time interval between innovation and sales. Still, these investments generate irreversible costs which have to be put in balance with profits accruing to the firm when starting its sales earlier than otherwise. We characterize the optimal investment policies under various assumptions concerning the market structure.
Number of Pages in PDF File: 28 Keywords: time-to-market, market structure, vertical product differentiation JEL Classification: L11, L13, O31 working papers seriesDate posted: June 24, 2005Suggested CitationContact Information
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