Process and product R&D by a multiproduct monopolist

It is shown that the claim in Lambertini that a multiproduct monopolist's incentive for process RandD declines with the number of products it offers is incorrect. This incentive is in fact an increasing function of the number of products in his model. I further extend the model of Lambertini to show that whether or not process RandD incentive and the number of varieties are positively related depends on the degree of scope economies in process RandD. Product innovation promotes process RandD if the degree of such scope economies is high (as in Lambertini), and discourages it if the degree of scope economies is low.