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R&D and Price Elasticity of Demand
The paper explores the relationship between the price elasticity of demand and the research and development (R&D) intensity of the product. The authors introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting, and R&D activity is treated as a fixed cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand.
Link
http://www.diw.de/deutsch/produkte/publikationen/diskussionspapiere/docs/papers/dp430.pdf