A dynamic analysis of a monopolist's efforts for improving product quality and process innovation with reference price effects under linear demand

Genlong Guo and Shoude Li

Managerial and Decision Economics, 2023, vol. 44, issue 4, 2328-2345

Abstract: This paper examines a monopolist's innovation efforts for improving product quality and process innovation with reference price effects. Our main results show that the system can achieve saddle‐point steady‐state equilibrium; the two efforts increase with the increase of reference price; although the price is still determined by the monopolist, the price under the social planner regulation is higher than that under the monopolist decision‐making; there is always a negative relationship between the product quality and the price; and memory parameter affects the complementarity (substitutability) relationship between these two efforts.

Date: 2023
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https://doi.org/10.1002/mde.3820

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:44:y:2023:i:4:p:2328-2345

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