Innovation et effet de remplacement du monopole: le cas des ressources non renouvelables

Jean-Christophe Poudou

Recherches économiques de Louvain, 2007, vol. 73, issue 1, 55-75

Abstract: Considering a cost reducing innovation, Arrow (1962) shows that a firm in monopoly suffers the replacement effect, that is, its valuation of the innovation is sub-optimal and less than in a context of technological competition. We look also at this problem but within the framework of an economy exploiting an exhaustible resource. One can show that the replacement effect is not always verified and can be reversed: the mining monopoly doesn?t ?rest on its laurels? when the price elasticity of demand for the resource is ?deeply? increasing. We discuss this result for the case of dynamic incentives to innovate and we show that, in those situations of demand, the mining monopoly innovate earlier that the competitive mining firm.

Date: 2007
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Related works:
Working Paper: Innovation et effet de remplacement du monopole: le cas des ressources non renouvelables (2007)
Working Paper: Innovation et effet de remplacement du monopole: le cas des ressources non renouvelables (2007)
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