A model of advertising with application to the German automobile industry

This paper develops a dynamic duopolistic model of advertising and price competition. Advertising accumulates a stock of goodwill which enters directly into the demand functions and both the cooperative and predatory effects of advertising are considered. It is shown that firms invest more in advertising the higher the degree of cooperativeness of advertising and some comparative static results are provided. In the second, empirical part of the article, estimations of the demand equations are presented using data from the German automobile industry. The main conclusion drawn is that advertising plays an important role in this market and has a predatory nature.     

Developing a model to evaluate the impacts of science,technology and innovation foresight on policy-making

Technology foresight as a policy intelligence tool can offer vital inputs for policy-making in various domains. The relationship between foresight and policy-making has been presented in the literature by the policy-related functions of foresight, but the literature reflects a theoretical gap with the systematic evaluation model for the impact of foresight on policy-making. This research seeks to bridge the existing gap and uses the mixed method for this purpose. The mixed method approach used in this paper is the sequential exploratory design. First, the conceptual model is developed in the qualitative part of this research by using meta-synthesis and constant comparative method (CCM) of analysis. Second, in the quantitative part, quantitative tests are used to evaluate the dimensions and components of the developed theoretical model. The data collection tool is a questionnaire. The results confirm the proposed dimensions of the evaluation model.     

A challenge of integrating technology foresight and assessment in industrial strategy development and policymaking

Appropriate demand articulation of emerging technologies to social needs are vital to the economic and social productivity, and it is essential to grasp the future trends of social needs and technology advancement to promote the strategic technology policy. Japan embarked on technology foresight in the early 1970s and has since been conducting a regular Delphi survey approximately every 5 years. To explore a new intelligent methodology for integrating technological seeds and social needs by articulating future demands, this paper reviews the following two cases: the Delphi-scenario writing (DSW) method, which is applied in 1977 for the home/office small facsimile, and the method of general assessment applied in 1972 for informationalization, which focused on the rapidly advancing information society, with a matrix scoring and policy-simulation method. Those new approaches were proved to be a powerful methodology to integrate the technology forecasting and assessment for comprehensive understanding of the emerging technologies and their social impacts in the form of integrated technology road mapping, which supports the integrated strategic planning methodology for enhancing the future innovation system.     

A multiregional model of China and its application

China's rapid economic transformation since 1979 has been accompanied by a stark regional disparity with the coastal provinces integrating swiftly into the world markets while inland regions lagging far behind in the industrialisation process. The growth imbalance has placed China's provinces into different stages of development and called for different policy responses to deal with different challenges they are facing. Similarly, a national policy initiated by the central government is likely to be interpreted and implemented in different ways when local governments take into consideration the different conditions in their localities. Therefore, it would be extremely valuable for policy makers and researchers to have an analytical tool that is capable of studying interactions among the provincial economies and the dynamic relationship between the centre and local governments. The multiregional econometric model of China presented in this paper is the first attempt to provide such a tool. The pioneering model consists of over 1200 equations, covering 30 provinces of China that are linked by inter-regional flows of goods and services. The model is used to study the impact of fiscal recentralisation in the 1990s. The counterfactual simulation results show that when China's central government diverted tax revenue from provincial governments, it achieved higher budgetary revenue for the central government but at the expense of lower overall budgetary revenue and slower economic growth.     

A theory of competitive industry dynamics with innovation and imitation

Empirical evidence on industry life-cycle reveals a pattern in which innovation rates remain fairly stable or are perhaps even higher at early stages, while patenting increases sharply as the industry matures. This increase in patenting in later stages is accompanied by net exit and lower rates of output growth and price decline. In this paper, we develop a dynamic model of a competitive industry with innovation and imitation that is consistent with these stylized facts. We derive an equilibrium growth path, along which leading firms invest in increasing the stock of technological knowledge and choose not to prevent imitation by other firms as long as the industry remains relatively small. As the industry expands including new entry, the leaders' optimal amount of investment gradually declines. We show that under some rather general conditions, there would exist a scale of the industry where innovating firms would choose to start preventing free imitation, bringing further expansion of the industry through new entry to a halt and causing net exit.     

A non-expected utility model and its application in practical auctions

ABSTRACT

This article presents a non-expected utility decision model which is nonlinear in the winning probabilities. The model not only explicitly expresses bidders’ attitudes to risk, but also addresses their preference over the bidding criteria. To demonstrate how to apply the model in the practical auction design, the first- and second-price auctions with both commission rate and reserve price are examined, respectively. For nonrisk-neutral bidders, the equilibrium bidding strategies are characterized, in which the commission rate has a significant influence on the bidding strategy through the critical valuation. However, the existence of the optimal commission rate is uncertain, but once it exists, it depends on the information rent of the highest or second highest order valuation in terms of the inverse hazard rate. With risk-aversion bidders, the only difference to the optimal reserve price is a constant between the first- and second-price auctions. The revenue comparisons show that the classical Revenue Equivalence Theorem fails in practical auctions with the commission rate. This article extends the application of the decision-making model in the auction design in theory and provides some guidance for the auction house and the seller to make their decisions in reality.     

ICT growth effects at the industry level: A comparison between the US and the EU

This is an empirical study on the growth impact of Information and Communication Technologies using industry-level data for the US and the EU industries over the period 1980-2000. A panel data approach is employed to estimate the ICT effect using the system GMM and the pooled mean group panel data estimators. The results vary depending on the period, the region, and the type of industry considered. The GMM estimates suggest a significant ICT effect on growth during the 90s both in the US and in the EU. This effect for the EU was strong in the early 90s and weakened afterwards, as opposed to the US where it strengthened in the late 90s. The results of the pooled mean group estimator confirm that the long run growth contribution of ICT was significantly positive in the industries of both regions and over the entire period 1980-2000. However, it seems that the productivity effects of ICT are mainly present in the industries which are either ICT producers or heavy ICT users.     

Market penetration of new products in segmented populations: A system dynamics simulation with fuzzy sets

The application of system dynamics methodology to the study of market penetration (diffusion) of new products offers considerable flexibility. The differential equations representing total (cumulative) sales need not be that restrictive as in those instances where solely mathematical tools are applied for their solutions. This paper first develops a mathematical formulation of “dynamic diffusion phenomena,” where the target population is not assumed to be constant in time. Besides incorporating the “marketing efforts” of the producer as an explicit variable, the model also gives due importance to the population characteristics affecting the diffusion phenomena. This is achieved by representing all variables and parameters in the differential equations as higher dimensional arrays. Then some basic properties of “fuzzy sets” are exploited to assign numerical values to the parameters. At the end, the problem is cast in a system dynamics setup for its solution. A computer solution with the help of a DYNAMO compiler for a hypothetical case is added to demonstrate the applicability of the ideas developed.     

广东省纺织业技术创新模式研究

介绍了广东省纺织业技术引进、消化吸收、创新的现状,根据广东纺织企业几个典范,重点剖析各企业的创新模式特征,提出了技术创新模式的应用范围及趋势,对促进我国纺织业技术创新发展有着积极意义和借鉴价值。     

Tax incidence in a model with perfect foresight of agents and rationing in markets

This paper examines the incidence of several taxes in a macroeconomic model. Producers and consumers optimize with perfect foresight. Price inertia leads to rationing in the market for goods and for labour. In the long run the system tends towards Walrasian equilibrium. Meanwhile there may be Keynesian Unemployment, Classical Unemployment or Repressed Inflation, with possible switches of regimes. Balanced budget policies are analysed by working through numerical examples.     

Creating marketing strategies in new technology markets: A study of the expert system industry

Technological innovation is widely recognized as a major factor influencing competitiveness. This is particularly true i n turbulent and dynamic IT markets. Consequently, the effective strategic management of technological innovation by companies is one route to securing their survival and growth. The focus of the research presented is the evolution of marketing strategies by innovators facing diverse competitive challenges in the expert system market. The study examined the role of strategic marketing i n the commercial exploitation of technology and how this role changes, especially after market launch. What was interesting urm the extent to which suppliers were not only designing new technologies but also creating business applications for the new technology. The acquisition of market know-how to devise end-,user applications was a vital ingredient i n securing a competitive advantage.     

Creating marketing strategies in new technology markets: A study of the expert system industry

Technological innovation is widely recognized as a major factor influencing competitiveness. This is particularly true i n turbulent and dynamic IT markets. Consequently, the effective strategic management of technological innovation by companies is one route to securing their survival and growth. The focus of the research presented is the evolution of marketing strategies by innovators facing diverse competitive challenges in the expert system market. The study examined the role of strategic marketing i n the commercial exploitation of technology and how this role changes, especially after market launch. What was interesting urm the extent to which suppliers were not only designing new technologies but also creating business applications for the new technology. The acquisition of market know-how to devise end-,user applications was a vital ingredient i n securing a competitive advantage.     

Incorporating Delphi results in system dynamics models: A case of Indian tea industry

The results of a Delphi study on the future of the Indian tea industry are presented. Most of the information obtained for the study helps in formulating and validating a system dynamics model. The model also considers the occurrence of new events as visualized by the panelists. It is shown, however, that the policies recommended by the panelists yield poor industry behavior when Delphi-predicted new events operate in the environment. This may be due to lack of comprehension of the complexity of interaction between policies proposed and new events visualized by the panelists. On the basis of this investigation, it is proposed that Delphi and system dynamics studies should complement each other in arriving at viable policy decisions.     

'Technology foresight towards 2020 in China': the practice and its impacts

Technology foresight has attracted increasing attention from government and academia as well as industry since the 1990s. However, the impact of technology foresight on national strategic decision-making varies from country to country. This paper aims to introduce the 'Technology Foresight towards 2020' exercise in China, which has been conducted by a research group in the Chinese Academy of Sciences. The paper consists of five parts: (1) introduction; (2) the framework for technology foresight towards 2020 in China; (3) the methodology including scenario building for identifying technology demands and the method for processing and analysing the data from a Delphi survey; (4) the major results of a Delphi survey in the following four research fields: Information technology, Biotechnology, Energy technology, Material science and technology; and (5) the impact of the research on decision-making concerning science and technology development in China.     

Developing an introductory curriculum in system modeling and simulation: The system dynamics approach

Under a grant from the Office of Education, a set of self-teaching, introductory materials in system dynamics has just been completed. The curriculum consists of six student learning packages which integrate text material, completely worked through examples, and open-ended exercises. The packages take students from initial problem conceptualization to building a mathematical model of the problem under study, and simulating the model over time with the aid of a computer. The curriculum also includes an extensive teacher's manual and comprehensive answer books. These materials have been and are being pilot-tested at the high school, undergraduate, and graduate school levels. Initial trial results indicate the materials do succeed in introducing computer simulation as a problem-solving tool to these audiences.     

The trade-off between innovation and defense industrial policy: A simulation model analysis of the Norwegian defense industry

The paper investigates the trade-off between innovation and defense industrial policy. It presents an agent-based simulation model calibrated for the Norwegian defense industry that compares different policy scenarios and examines the effects of a pending EU market liberalization process. The paper points to two main results. (1) It finds that a pure scenario where national authorities focus on, and provide support exclusively for, either a) international competitiveness or b) national defense and security objectives, is more Pareto efficient than a corresponding mixed strategy where policy makers simultaneously pursue both international competitiveness and defense and security objectives. (2) Under the conditions of the new EU liberalization regime, it finds that a stronger and more visible trade-off will emerge between international competitiveness and national defense and security objectives. Policy makers will have to choose which to prioritize, and set a clear agenda focusing on one of the two objectives.     

A model of the behavior of farmers and its application to agricultural policies

In this paper, we examine the practical implications for agricultural policies of a model of farmers' behavior. Part I describes the main features of the model and illustrates by empirical evidence the reasons why it seems to be relevant in explaining actual behaviors.     

Innovation and the demand for food and drug labelling regulation in an evolutionary model of industry dynamics

Product innovation is examined in the context of an evolutionary model of industry and market behaviour in which a new product with a cost advantage and an unobservable, adverse characteristic competes with an existing product. Absent regulatory responses that ensure credible labelling, markets converge to steady state equilibria in which only the new product is traded. With credible labelling, the markets for the commodities become segmented. Welfare effects for consumers depend on the distribution of labelling ‘property rights’ between new and old product firms, market access, the cost advantage of the new product, and the magnitude of labelling costs     

Dealing with the dynamics of technology roadmapping implementation: A case study

Nowadays, companies are facing many challenges. The product life cycle is getting shorter while the complexity and the demand for product customization are increasing. Technology Roadmapping (TRM) has been widely used as a strategic management tool to help organizations in effectively identifying potential products or services for the future, determining proper technology alternatives, and mapping them with resource allocation plans. With the completion of TRM implementation, any organization can be assured that its required technologies and infrastructures will be ready when needed. Implementing TRM as a part of the ongoing strategic/business planning process is challenging because it may affect the organizational work process, structure, and culture. Therefore, an organization needs to understand how the changing roles and responsibilities of key players involved in the TRM process match with the dynamics of TRM implementation in each stage. This paper illustrates the dynamics of TRM implementation and presents a case study to demonstrate how one of the leading building product manufacturers in the ASEAN region went through the process.