R&D inefficiency with bundling in systems markets

R&D inefficiency with bundling in systems markets

With diminishing returns to R&D, bundling makes firms invest more in component products with higher production costs. As a result, bundling causes an inefficient allocation of R&D resources from the social standpoint.

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Bibliographische Detailangaben
Veröffentlicht in:Economics letters 2002-03, Vol.75 (1), p.25-30
1. Verfasser: Lee, Gwanghoon
Format: Artikel
Sprache:eng
Schlagworte:
Bundling
Economic systems
Economic theory
Economics
Inefficient allocation
Market
R&D
Systems market
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Beschreibung
Zusammenfassung:With diminishing returns to R&D, bundling makes firms invest more in component products with higher production costs. As a result, bundling causes an inefficient allocation of R&D resources from the social standpoint.
ISSN:0165-1765
1873-7374
DOI:10.1016/S0165-1765(01)00592-4