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Considering a cost reducing innovation, Arrow (1962) shows that a firm in monopoly suffers the replacement effect, that is to say, its valuation of the innovation is sub-optimal and less than in a context of technological competition. We will also look at this problem but in the context of an economy exploiting a finite resource. We will then show that the replacement effect cannot always be verified and is sometimes even reversible: a mining monopoly does not “rest on its laurels” when the price elasticity of demand for the resource is rapidly increasing. We discuss this result in the context of dynamic incentives to innovate and we will show how, in these situations of demand, the mining monopoly sometimes innovates faster than the firm in competition.