Econ 483_Lecture 7_Process innovation_Cournot(1)

Process innovation possible sources of process

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Unformatted text preview: Process innovation Possible sources of process innovation (examples): New work ‡ows or procedures New machinery Changes in layout of factory Better raw material or intermediate inputs used Better management methods New supply chains Lecture 7: Process innovation, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. R&D investment & Cournot competition Lecture 7: Process innovation, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. Strategic investment & Cournot competition A …rm invests in Research & Development (R&D) to decrease its marginal cost and obtain a competitive advantage. Timing of the game: Stage 1 Stage 2 A …rm (say: …rm 1) makes an R&D investment. Firms compete à la Cournot in the product market. Pro…ts are realized. Lecture 7: Process innovation, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. Required readings Church & Ware’ textbook; s subsections: 8.1, 8.2.1,15.1 pages 526 - 529, 15.2, exercise 15.1: pages 534 - 535 Lecture 7: Process innovation, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved....
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This note was uploaded on 03/16/2014 for the course ECON 483 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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