Time-to-Market in Vertically Differentiated Industries

CORE Discussion Paper No. 2004/77

28 Pages Posted: 24 Jun 2005

See all articles by Emanuele Bacchiega

Emanuele Bacchiega

University of Bologna - Department of Economics

Jean J. Gabszewicz

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Ornella Tarola

University of Lugano - Institute of Economic Research

Date Written: November 2004

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.

Keywords: time-to-market, market structure, vertical product differentiation

JEL Classification: L11, L13, O31

Suggested Citation

Bacchiega, Emanuele and Gabszewicz, Jean J. and Tarola, Ornella, Time-to-Market in Vertically Differentiated Industries (November 2004). CORE Discussion Paper No. 2004/77. Available at SSRN: https://ssrn.com/abstract=747346 or http://dx.doi.org/10.2139/ssrn.747346

Emanuele Bacchiega (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
40126 Bologna, 40125
Italy
+390512098486 (Phone)
+390512098493 (Fax)

Jean J. Gabszewicz

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Ornella Tarola

University of Lugano - Institute of Economic Research ( email )

CH-6900 Lugano
Switzerland
+41919124661 (Phone)
+41919124662 (Fax)

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