Innovation announcement with vertical differentiation

Article Abstract:

The timing of announcements of innovations in a vertically differentiated industry is investigated. Early announcements in a quality-price game give the competing company the opportunity to adjust its quality based on the already known outcomes of the innovation. Late announcements only enable the low quality company to discover the innovative rival organization's quality before they adjust their prices, but not before they adjust their quality. Early announcements are found to be socially desirable, but not advantageous for the innovative firm.

Competition (Economics), Product quality, Economics, Pricing, Business enterprises, Information theory, Information theory in economics

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Exploiting innovation options: an empirical analysis of R&D-intensive firms

Article Abstract:

An empirical analysis on biopharmaceutical projects reveals that transaction cost hazards express themselves in both the internal and market-mediated options. The effect of information asymmetry conditions is dependent on the abilities of the firm; companies with high levels of of development-associated resources reveal a negative association between information asymmetry conditions and reliance on market exchange, while firms with low levels of such resources show a positive relationship.

Biochemistry, Research and Development in the Physical, Engineering, and Life Sciences, Research, Technological innovations, Biotechnology

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