A simple model of R&D: An extension of the Dorfman-Steiner theorem
This paper extends the seminal Dorfman-Steiner (American Economic Review, 44, 826-36, 1954) theorem by putting underlying structures on the determination of market share and on the production of quality or technology. The model developed in this paper yields a demand-pull, technology-push theory of R&D, where the profit-maximizing R&D intensity (i.e., the ratio of R&D expenditure to sales) is determined jointly by consumer characteristics, represented by the elasticities of consumer value with respect to price and quality, and firm-specific technological competence or simply R&D productivity, measured as the R&D elasticity of quality or technological output.
Year of publication: |
2002
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Authors: | Lee, Chang-Yang |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 9.2002, 7, p. 449-452
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Publisher: |
Taylor & Francis Journals |
Saved in:
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