Author: Anthony Horsley
Publisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 0

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Author: A. Horsley
Publisher:
ISBN:
Category :
Languages : en
Pages : 224

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Author: Ronald L. Goettler
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
We investigate the relationship between competition and innovation using a dynamic oligopoly model that endogenizes both the long-run innovation rate and market structure. We use the model to examine how various determinants of competition, such as product substitutability, entry costs, and innovation spillovers, affect firms' equilibrium strategies for entry, exit, and investment in product quality. We find an inverted-U relationship between product substitutability and innovation: the returns to innovation initially rise for all firms but eventually, as the market approaches a winner-take-all environment, laggards have few profit scraps to fight over and give up pursuit of the leader, knowing he will defend his lead. The increasing portion of the inverted-U reflects changes in firm's investment policy functions, whereas the decreasing portion arises from the industry transiting to states with fewer firms and wider quality gaps. Allowing market structure to be endogenous yields different results compared to extant work that fixes the market structure.

Author: Shiou Shieh
Publisher:
ISBN:
Category : Diversification in industry
Languages : en
Pages : 38

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Author: Pierre Maillard
Publisher: John Wiley & Sons
ISBN: 1848218206
Category : Technology & Engineering
Languages : en
Pages : 366

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The aim of this book is to present new quality practices adapted to the specifics of innovation processes in order to increase their chances of success while also facilitating support of the creators who are often put off by the constraints of traditional quality management methods. These practices are applied in businesses of all sizes who do not want to broadcast on this subject as they are at the center of the factors that make them competitive. These quality approaches, which are specific to each innovation process, rest on a common methodological platform that is at the core of this book.

Author: Thang Quang Nguyen
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 290

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Book Description
The dissertation has three main chapters on product quality innovation. First, we compare innovation effort and social welfare between monopoly, duopoly, and the social planner in a dynamic model with quality dependent on a continuous know-how stock. The technology frontier--the largest reachable know-how socks--does not always positively depend on competitiveness, i.e. a duopoly may technologically surpass the social planner. However, social welfare is always positively tied to competitiveness. Second, with a general equilibrium model, we derive a relative price function expressing productivity and quality effects, and develop a method for inferring relative quality changes. An application to services versus goods of the US from 1946-2006 provides evidence on aggregate quality changes and suggests us to incorporate quality variations when explaining relative prices. Third, we build a two-product model where productivity changes lead to reallocations of labor between quantity production and quality innovation. The correlation between relative productivity and relative quality is negative for low-range substitutability and positive for medium-range substitutability between two products. Looking at services versus goods of the US, the correlation is negative and productivity-driven quality can play a significant role in general quality development.

Author: Papusson Chaiwat
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 258

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Book Description
The product quality plays important role in modeling competition. This paper explains the behaviors of both consumers and firms by using Monte Carlo simulation when they face quality uncertainty during the competition. Quality uncertainty will lead to market failure, which decreases consumer welfare and distorts profits among firms. Uninformed consumers that face difficulty to recognize quality of each product are easily deceived by firms. Because consumers use price as a signal of product quality, deceiving firms set the high price with low quality (pooling price strategy) to deceive uninformed consumers. Model of simulation shows the Nash equilibrium results for three cases. In the first cases when all consumers are informed, all firms will set reasonable price with their quality (separating price strategy). The utility is the highest. In the second cases when the market has a small fraction of uninformed consumers and low deceiving power of firm, at the Nash equilibrium the lowest quality producing firm will use the pooling price strategy. The consumer utility decreases when the uninformed fraction increases. In the last case with more uninformed consumers or high power of deceiving, at the Nash equilibrium firms that produce the highest quality and the lowest quality will use the separating price strategy whereas the firms that produce medium quality products will use the pooling price strategy. The medium quality firms have incentives to create the unclear quality to consumers by using the pooling price strategy to increase profits. The utility of consumers in last two cases are not maximized because some consumers suffer from consuming low-quality products with high-priced. Consumers will adjust their taste to eliminate quality uncertainty. When no ones will be deceived, welfare of buyers is high but there are still some losses from deceiving attempt. This utility level is lower than in the case when there is no quality uncertainty. Policymakers can solve this problem by giving information about quality to buyers before they make a decision. Government should set up the regulation for the producer to reveal quality of their product in comparison with others opponents or make the consumers guide book to explain the feature of products to consumers. These measures will help eliminate the quality uncertainty to uninformed consumers and raises social welfare of market.

Author: Luca Lambertini
Publisher: Edward Elgar Publishing
ISBN: 9781781958315
Category : Business & Economics
Languages : en
Pages : 240

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Book Description
'This is a high-quality book on an important and central topic in the theory of industrial organisation. It is a cohesive and extremely well written volume which is destined to become a standard work on the subject.' - Mark Casson, University of Reading, UK This original new book offers a comprehensive and engaging perspective on the theory of vertical differentiation. It enables the reader to grasp the key concepts and effects that product quality has both on firms' behaviour and market structure, and the ways in which this relationship has evolved. With contributions from prominent figures in the field, the book investigates a number of important topics, such as the choice of the optimal product range, profit sharing, the existence of equilibrium in duopoly games, positional effects attached to status goods, international trade, collusion, advertising and the dynamics of capital accumulation for quality improvement and product innovation. Using both static and dynamic approaches, these aspects are assessed in relation to the manifold issues of regulation, competition policy and trade policy. Product differentiation and its influence on consumer behaviour and the performance of firms is a core topic in the existing literature in the fields of industrial organization, international trade and economic growth. This book will be an essential read for researchers, students and professional scholars working in these areas, especially those with an interest in antitrust regulation.

Author: W.M. Wadman
Publisher: Routledge
ISBN: 1315501430
Category : Business & Economics
Languages : en
Pages : 530

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Book Description
Examines consumer decision-making on products and services of variable quality at the level of retail markets. Addresses for the first time consumer-producer interaction at the level of the individual consumer; issues of quality, consumption experience, and willingness-to-pay, as exhibited by individual consumers; and how these issues affect the decision-making process.

Author: Dirk Bergemann
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 58

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