Time-to-Market in Vertically Differentiated Industries
University of Bologna - Department of Economics
Jean J. Gabszewicz
Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)
University of Lugano - Institute of Economic Research
CORE Discussion Paper No. 2004/77
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, O31working papers series
Date posted: June 24, 2005
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