Cross-bidding impact throughout the product life cycle

Two products at different points of the product life cycle have been chosen to analyse the effect of cross-bidding in competing auctions. The findings indicate that this strategy can have a different impact depending on the phase of the cycle.     

Nanopatenting patterns in relation to product life cycle

This paper compares the positions of national nanotechnology development efforts based on analyses of patenting from 1994 to 2005. Searching Derwent world patent index files, 19,351 unique patents are collected based on a composite search algorithm. These abstract records are categorized multiple ways — by top patent assignees, by International Patent Classifications, and through content analyses of the “Use” subfield. We classify the R&D activities by using a 3-stage, life cycle, value chain of nano-raw materials, nanointermediates, and nano-products. Profiles of Japanese, American (US), and European (German) emphases show notable differences in concentration and value chain niche. Such characterizations offer significant research management and policy implications.     

产品生命周期细分与营销策略

产品生命周期理论是市场营销的核心理论之一。经典产品生命周期理论对解决企业的营销问题具有十分重要指导意义，但是它也存在着明显的缺陷：同一产品生产者由于进入市场时间的不同，只有最初进入市场的生产者才能运用经典产品生命周期理论指导营销活动。经典产品生命周期理论包括相互联系与区别的两个方面；抽象产品生命周期和具体产品生命周期。在实践过程中，只有把两者结合起来区别不同的关系状况，才能指导不同的企业开展营销活动。     

The product life cycle and sample representativity bias in price indexes

Official price indexes are usually calculated using matched samples of products. If products exhibit systematic price trends at different points in their life cycle then matched sample methods may introduce bias if the life cycle movement in the sample does not adequately reflect that in the population. This article explores the extent of these life cycle pricing effects and then examines the bias it can introduce in measured inflation. A large US supermarket scanner data set for six cities and six products over 12 years is used. Using hedonic methods we find that the life cycle component of price change is important across a range of products and cities. To explore the bias introduced by these movements, we use simulations that construct indexes with different sample update frequency. For indexes that are never completely resampled, we find an annual absolute bias of 0.88 and 0.59 percentage points depending upon whether we use the actual prices or prices imputed from our hedonic model. This compares with absolute biases of 0.34 and 0.10 percentage points for the corresponding cases for samples, which are re-selected annually. Thus our results provide strong support for more frequently updating index samples.     

基于循环经济的产品生命周期环境成本控制

进入21世纪以来，日益严重的资源匮乏和环境污染问题使企业逐渐重视循环经济的发展。对于我国而言。应借鉴国外环境成本控制的经验，将循环经济的理论应用于企业环境成本控制中，并通过产品生命周期法对产品环境成本进行新的划分；同时结合产品生命周期确定环境成本控制的思路，以更好地实现环境成本控制。     

The technology adoption life cycle attractor: Understanding the dynamics of high-tech markets

Unlike more stable industries, high-tech firms must constantly be in a strategy development phase. These companies are in desperate need of assistance in strategy formulation. This paper introduces a quantitative (rather than subjective) approach to help high-tech firms to understand their position in the technology adoption life cycle using some of the principles and tools of Chaos and Complexity theories. This approach is demonstrated by using data sets of three case studies in the hard drive, microprocessor, and server high-tech industries.     

The dynamics of inter-firm networks in the course of the industry life cycle: the role of appropriability

This paper examines the dynamics of inter-firm networks and introduces a conceptual framework for explaining why inter-firm networks change over time. The framework is based on the idea that patterns of inter-firm linkages are linked to the life cycle development of an industry. Special emphasis is placed on the role of appropriabiliy, i.e. a firm's ability to capture the profits generated by its innovations. The (trans)formation of inter-firm networks in three industries is examined and used to illustrate the relevance of the framwork. One important inference from our study is that public policy makers and manageers should take into account the phase of industry development before implementing policies to create and/or change inter-firm networks.     

Multiple generation product life cycle predictions using a novel two-stage fuzzy piecewise regression analysis method

Product life cycle (PLC) prediction plays a crucial role in strategic planning and policy definition for high-technology products. Forecast methodologies which can predict PLCs accurately can help to achieve successful strategic decision-making, forecasting, and foresight activities in high-technology firms, research institutes, governments, and universities. Over the past few decades, even though analytic framework strategies have been proposed for production, marketing, R&D (research and development), and finance, aiming at each stage of PLCs, forecast methodologies with which to predict PLCs are few. The purpose of this research is to develop a novel forecast methodology to allow for predictions of product life time (PLT) and the annual shipment of products during the entire PLC of multiple generation products. A novel two-stage fuzzy piecewise regression analysis method is proposed in this paper. In the first stage, the product life-time of the specific generation to be analyzed will be predicted by the fuzzy piecewise regression line that is derived based upon the product life-time of earlier generations. In the second stage of the forecast methodology, the annual shipment of products of the specified generation will be predicted by deriving annual fuzzy regression lines for each generation, based upon the historical data on the earlier generations' products. An empirical study predicting the life-time and the annual shipment of the 16 Mb (Mega bit) DRAM (Dynamic Random Access Memory) PLC is illustrated to validate the analytical process. The results demonstrate that two-stage fuzzy piecewise regression analysis can predict multiple generation PLT and PLC precisely, thereby serving as a foundation for future strategic planning, policy definitions and foresights.     

Optimal taxation over the life cycle

We derive the optimal labor income tax schedule for a life cycle model with deterministic productivity variation and complete asset markets. An individual chooses whether and how much to work at each date. The government must finance a given expenditure and does not have access to lump sum taxation. We develop a solution method that uses the primal approach to solve for the optimal non-linear tax function. The average tax rate determines when an individual will work while the marginal tax rate determines how much she will work. Even in the absence of redistributive concerns, the optimal tax schedule has an increasing average tax rate at low levels of income to encourage labor market participation. The marginal tax rate at the top is strictly positive. Finally, the model is used to assess the effects of changing the current tax schedule to the optimal one. Under the preferred parameters, this delivers a welfare gain equivalent to 0.67 percent of lifetime consumption.     

Asset inequality over the life cycle

This note seeks to explain an interesting empirical regularity in the inequality of asset holdings stratified by the age of individuals. The regularity, which has evidently been overlooked, is that Gini coefficients of assets follow a U-shaped pattern over the life cycle. This pattern spans more than a century of diverse survey data from the United States. The theoretical explanation of the regularity is based on the hypothesis that inherited assets are intrinsically more unequal than accumulated savings, and that bequests are intrinsically more unequal than lifetime consumption. Shifts in the relative importance of inherited assets and bequest would then explain changes in the inequality of total assets.     

Optimal fertility along the life cycle

We explore the optimal fertility timing in a four-period OLG economy with physical capital, whose specificity is to include not one, but two reproduction periods. It is shown that, for a given total fertility rate, the economy exhibits quite different dynamics, depending on the timing of births. If all births take place in the late reproduction period, there exists no stable stationary equilibrium and the economy exhibits cyclical dynamics due to labor growth fluctuations. We characterize the long-run social optimum and show that optimal consumptions and capital depend on the optimal cohort growth factor, so that there is no one-to-one substitutability between early and late fertility. We also extend Samuelson’s Serendipity Theorem to our economy and study the robustness of our results to: (1) endogenizing fertility timing, (2) assuming rational anticipations about factor prices, (3) adding a third reproduction period.     

Overconfidence and consumption over the life cycle

Overconfidence is a widely documented phenomenon. In this paper, we study the implications of consumer overconfidence in a life-cycle consumption/saving model. Our main analytical result is a necessary and sufficient condition under which any degree of overconfidence concerning the mean return on savings can produce a hump in the work-life consumption profile. This condition is almost always met in the data. We show by simulations that overconfidence concerning the variance of the return can have little effect on the long-run average behavior of consumption over the life cycle, and that our basic conclusion is fairly robust with various realistic modifications to the baseline model. We interpret the general applicability of our analytical framework and discuss our numerical results in the light of aggregate consumption data.     

Habit formation and housing over the life cycle

We explore the role of habit formation in housing in explaining the life-cycle household allocations. Empirical studies about households in the U.S. reveal that the housing profile increases monotonically until age mid-60s and then flattens out. The model is realistically calibrated and solved numerically under different habit strength parameters. For all values of the parameter, our model produces lower reduction of housing for the elderly compared to the standard model which does not include habit formation. The amount of reduction in housing in the old ages and the level of housing decrease significantly as habit strength increases. The person becomes more attached to his house with a higher habit strength. Considering intolerance towards housing reductions, one consumes a lower amount of housing in the young ages to be able to maintain it in the old ages. These results suggest that in addition to the transaction costs in house trading, habit formation in housing also has a merit in explaining the preservation of housing for elderly people. Our model improves on the literature by investigating the effects of a habit formation behind household allocations and by reducing the role of transaction costs in solving the housing puzzle of the elderly. It contributes to the literature by using a new model with a deep habit preference form and housing. Our model should be preferred to the existing ones since it provides a richer and more real framework for modeling households.     

Ecological footprint accounting in the life cycle assessment of products

We present and discuss ecological footprint (EF) calculations for a large number of products and services consumed in the western economy. Product-specific EFs were calculated from consistent and quality-controlled life cycle information of 2630 products and services, including energy, materials, transport, waste treatment and infrastructural processes. We formed 19 homogeneous product/process subgroups for further analysis, containing in total 1549 processes. Per group, the average contribution of two types of land occupation (direct and energy related) to the total EF was derived. It was found that the ecological footprint of the majority of products is dominated by the consumption of non-renewable energy. Notable exceptions are the EFs of biomass energy, hydro energy, paper and cardboard, and agricultural products with a relatively high contribution of direct land occupation. We also compared the ecological footprint results with the results of a commonly used life cycle impact assessment method, the Ecoindicator 99 (EI). It was found that the majority of the products have an EF/EI ratio of around 30 m²-eq. yr/ecopoint ± a factor of 5. The typical ratio reduces to 25 m² yr/ecopoints by excluding the arbitrary EF for nuclear energy demand. The relatively small variation of this ratio implies that the use of land and use of fossil fuels are important drivers of overall environmental impact. Ecological footprints may therefore serve as a screening indicator for environmental performance. However, our results also show that the usefulness of EF as a stand-alone indicator for environmental impact is limited for product life cycles with relative high mineral consumption and process-specific metal and dust emissions. For these products the EF/EI ratio can substantially deviate from the average value. Finally, we suggest that the ecological footprint product data provided in this paper can be used to improve the footprint estimates of production, import and export of products on a national scale and footprint estimates of various lifestyles.     

Modelling the demand for housing over the life cycle

We model individual demand for housing over the life cycle, and show the aggregate implications of this behaviour. Individuals delay purchasing their first home when incomes are low or uncertain. Higher house prices lead households to downsize, rather than to stop being owners. Fixed costs (property transactions taxes) have important impacts on welfare (a wealth effect) and house purchase decisions (substitution effect). In aggregate, positive house price shocks lead to consumption booms among the old but falls in consumption for the young, and reduced housing demand; positive income shocks lead to consumption booms among the young and increased housing demand.     

Multi-product firms and business cycle dynamics

Recent empirical evidence provided by Bernard et al. (2010) and Broda and Weinstein (2010) shows that a significant share of product creation and destruction in U.S. industries occurs within existing firms and accounts for an important share of aggregate output. In the present paper, and consistent with this evidence, we relax the standard assumption of mono-product firms in a dynamic stochastic general equilibrium model. Our analysis is based on a model of firm dynamics with two deviations from the conventional real business cycle framework—imperfect competition with endogenous entry and multi-product firms. The combination of these two features enables our model to successfully generate a mechanism that accounts for the strong procyclicality of product creation. Due to the proliferation effect induced by firm-level adjustments in product scope, we show that our model embodies a quantitatively important magnification mechanism of aggregate shocks.     

Patent life cycle: New evidence

Patents and their renewals are critical because they protect inventions and reinforce information reported to investors about the utility and the quality of inventions. Thus, they signal the appropriate use of financial resources being invested, notably in research and development departments, and future revenues for their owner. Based on a sample of about 22,700 European patents, our research contributes to existing literature on patent renewal by two relevant outcomes. The first contribution proposes a possible definition of a European patent life cycle: abandonment of procedure, natural abandonment, and late withdrawal. The second contribution shows two main factors that influence the renewal of a European patent by examining delivery time and the cumulative number of citations.Our results show that the procedure is the key issue of structuring the patent's life. In addition, patents' viability is likely to happen given that a part in a series of patents is increasing, which means that valuable patents are often cited by later ones. The relationship stems from the rational behavior of market operators who will try to minimize essential ownership.     

The product innovation process and GDP dynamics

In this paper, we explain GDP dynamics through an analysis of the forces that modify the structure of the economy. These forces are represented by the entry of new firms and product innovations. Our model is inspired by Bak’s sand pile model, and the entry of a new firm or innovation is comparable to dropping a grain of sand in Bak’s model. The resulting model involves the insights of both Keynes and Schumpeter. It could be defined as Keynesian because the aggregate output is demand driven. That said, the model can mainly be labeled as Schumpeterian for several reasons: (i) innovations have a key role, (ii) credit is involved in supporting the innovation process, (iii) innovations partially destroy old industries, and finally (iv) without innovations, the system gradually approaches its stationary state. In this simple model, the change in the number of sectors (products) of the economy is the decisive factor with the following results: (1) the aggregate production has an increasing trend; (2) fluctuations are asymmetric; (3) recessions have a “creative destruction” explanation; (4) “classical” cycles are gradually replaced by “growth” cycles.     

Product and process innovations in the life cycle of an industry

Filson [Rev. Econ. Dyn. 4 (2001)] uses industry-level data on firm numbers, price, quantity and quality along with an equilibrium model of industry evolution to estimate the nature and effects of quality and cost improvements in the personal computer industry and four other new industries. This paper studies the personal computer industry in more detail and shows that the model explains some peculiar patterns that cannot be explained by previous life-cycle models. The model’s estimates are evaluated using historical studies of the evolution of the personal computer industry and patterns that require further model development are described.     

A life cycle analysis of social security

Summary We develop an applied general equilibrium model to examine the optimal social security replacement rate and the welfare benefits associated with it. Our setup consists of overlapping generations of 65-period lived individuals facing mortality risk and individual income risk. Private credit markets, including markets for private annuities, are closed by assumption. Unlike previous analyses, we find that an unfunded social security system may well enhance economic welfare. In our benchmark economy, the optimal social security replacement rate is 30%, and an empirically more plausible replacement rate of 60% raises welfare compared with an economy with no social security system.We would like to thank Andy Atkeson, V. V. Chari, Steve Davis, Paul Evans, Lars Hansen, Tim Kehoe, Nobu Kiyotaki, Ed Prescott, José-Victor Ríos-Rull, Richard Rogerson, Tom Sargent, Nancy Stokey, Dick Sweeney, Robert Townsend, and the participants of the NBER Economic Fluctuations Small Group Workshop on Micro and Macro Perspectives on the Aggregate Labor Market in Palo Alto, the NBER General Equilibrium Theory Conference in Minneapolis, the Money and Banking Workshop at the University of Chicago, and the NBER Summer Institute. An earlier version of this paper was titled A Dynamic Stochastic General Equilibrium Analysis of Social Security. This material is based upon work supported by the National Science Foundation under Grant No. SES-9210291. We also thank the Minnesota and San Diego Supercomputer Centers for their support.