Spatial Price Discrimination with Heterogeneous Firms

In this paper we aim to explain intuitively heterogeneous firms’ optimal location decisions in a simple spatial market. To do so, we present and solve a four‐stage game of entry, location, pricing and consumption in a spatial price discrimination framework with arbitrarily many heterogeneous firms. We provide a unique equilibrium outcome without imposing restrictions on the distribution of marginal costs across firms.     

Localized Competition,Heterogeneous Firms and Vertical Relations

This paper investigates the link between firms' geographic configuration and market power in imperfect markets. We consider two related setups. The first illustrates the relevant characteristics of the pricing equilibrium. A main implication is that the equilibrium price vector changes in accordance with the firms' spatial configuration. The second, where firms operate as downstream retailers affiliated to rival upstream wholesalers, shows that upstream market power is strongly affected by an index of geographic concentration which reflects the spatial configuration of retailers. Finally, our analysis provides several insights for market delineation as well as merger evaluation and remedies.     

Collaborative Networks in Oligopoly with Asymmetric Firms

Review of Industrial Organization - This paper studies collaborative R&D networks among ex ante asymmetric firms. In the first stage firms form bilateral collaborative links, which reduce...     

Collusion Under Imperfect Monitoring with Asymmetric Firms

We explore the effects of asymmetries in capacity constraints on collusion where market demand is uncertain and where firms’ sales and prices are private information. We show that all firms can infer when at least one firm's sales are below some firm‐specific ‘trigger level.’ When firms use this public information to monitor the collusive agreement, price wars may occur on the equilibrium path. Symmetry facilitates collusion but, if price wars are sufficiently long, then the optimal collusive prices of symmetric capacity distributions are lower on average than the competitive prices of asymmetric capacity distributions. We draw conclusions for merger policy.     

Product Growth Strategies in Young High-Technology Firms

This article presents an analysis of the strategies, business practices and growth patterns of 68 small, young, high-technology firms. These firms manufactured high-technology goods or produced advanced computer software products, had at most 100 employees and reported under $30 million in annual sales. In reporting the results of her study, Teresa Pavia writes that neither a technological growth path (new products to existing customers) nor a market-expansion growth path (existing products to new customers) is superior. Practices that minimize strategic dependencies and produce a high-quality product that suits the customer's needs directly (needing no further modifications after the sale) are associated with success. Firms that have used market expansion to grow demonstrate higher levels of systematic planning and describe their industry as rapidly changing. Furthermore, they describe themselves as technologically innovative and their customers as well informed about the products they buy.     

Horizontal Product Differentiation: Disclosure and Competition

This paper studies firms' incentives to disclose horizontal product attributes in a competitive environment. With competition, two elements play an important role: whether (i) firms can disclose only their own product characteristics or also those of their competitors, and whether (ii) competitors can react with their pricing decisions to the type of information disclosed. In all possible cases, full revelation is an equilibrium outcome. More importantly, it is generically the unique equilibrium outcome when (i) advertising is comparative and (ii) prices are also advertised, that is, announced simultaneously with the product information. When advertising is noncomparative or prices are not advertised, many nondisclosure equilibria exist.     

A Note on Endogenous Market Structure under Heterogeneous Firms*

Industries, such as semiconductors and biotechnology, are characterized by heterogeneous research productivity and vertically differentiated products. In this note, I relax the assumption of symmetric R&D costs in Sutton [1998] and derive the lower bounds to market concentration when entry and R&D investments in product quality are jointly determined. I show that the lower bound to concentration depends on the degree of vertical differentiation, which is a function of market size and quality choices. My findings imply that empirical applications that fail to account for differences in quality will be biased towards the null hypothesis of exogenous entry costs otherwise.     

New Product Management Practices of Small High Technology Firms

Various methods exist for managing the planning, cost estimating, scheduling and statusing of new product development projects. David Boag and Brenda Rinholm investigate whether the use of formal management procedures and structured frameworks are the most effective methods for achieving control over new product development activities. This article describes the new product development management practices of 33 small and medium-sized high technology companies. The authors employ a judgmental procedure to group the firms into three stages of development for their management of new products. Findings indicate that success at new product development is greater for more formalized companies than for companies which are less formalized or which use informal methods.     

Product Innovation by Smaller, High-Technology Firms in Canada

Russell Knight has surveyed 124 small, high-technology firms in Canada to learn more about the processes they use to develop and market innovative products. The scope of his survey included an investigation of planning early in the product's development cycle, how products move from R&D to mass marketing, and how firms learn about their markets in very specialized areas. In general, Knight finds that the firms have more technical than general management expertise. Technically trained entrepreneurs have difficulty with general management skills needed to facilitate the successful introduction of new products.     

A Dynamic Model of Advertising and Product Differentiation

This paper analyses a differential game of duopolisticrivalry through time where firms can use advertisingand price as competitive tools. Two cases are consideredwhereby: (1) advertising has the main effect ofincreasing market size and firms differ in productionefficiency; (2) advertising has both predatory and cooperativeeffects in a symmetric market. The former shows thatmarket shares and advertising shares are positivelycorrelated and that market size increases with thedifference in firms' relative efficiency. The latterhighlights the differences in the feedback andopen-loop strategies. It is shown that firms' advertisingare strategic complements and that profits are higherin the feedback equilibrium because firms advertise more.The applicability of the model in markets wherefranchise contracts and dealership agreements operateis also discussed.     

市场结构与横向产品差别化的相互关系分析

产品差别化对市场结构的形成有很大的作用,经典的豪特林模型只得出了产品差别最小化和最大化原则,由此模型得到的市场结构为完全竞争市场和寡头垄断市场,但垄断竞争市场却无法得到。文章在豪特林模型的基础上构造出统一框架,不但分析产品最大和最小差别情况,而且提出中间程度差别化的分析模型。得出所时应的三种市场结构。尤其是中间程度的差别化对应的垄断竞争市场。对这三种市场结构进行社会福利分析,得出在消费者不同质时,相对于完全竞争市场,垄断竞争市场是相对较好的选择。     

Advertising with Subjective Horizontal and Vertical Product Differentiation

In this paper, we analyze the impact of advertising on markets wheresubjective horizontal and vertical product differentiation are important. A simple model showshow advertising can be used to create subjective horizontal and vertical differentiation.The model predicts that firms are likely to be symmetric when advertising creates subjective horizontaldifferentiation and that name and generic brands are most likely to coexist in markets whereadvertising creates subjective vertical differentiation. In all cases, the ability toadvertise creates distance between products which increases the market power of firms. Finally, severalreal world examples are used to illustrate the conditions under which the model is most relevant.     

Factors Affecting New Product Forecasting Accuracy in New Firms

This study identifies factors that seem to influence a new firm's ability to accurately forecast new product sales. William Gartner and Robert Thomas present a conceptual model and develop hypotheses that specify antecedent factors prior to new product launch, such as the founder's expertise and the marketing research methods used, as well as environmental factors occurring after product launch, such as competitive factors and market volatility, that influence new product forecasting accuracy. The hypotheses were tested with data collected from a survey of 113 new U.S. software firms. Some tentative guidelines for improving sales forecast accuracy among new firms are offered. Directions for future research are discussed.     

New Product Idea Activities in Large Technology Based Firms

In a previous article, Norman McGuinness developed a model of idea generation processes used by small firms. Here he reports similar patterns for larger firms but adds a stage he labels problem definition. Since his model describes the progress of ideas through various predevelopment stages, this article yields additional insight into better management practices. It emphasizes that search involves a system of social activities within the organization and also distinguishes between planned and unplanned search, structured versus unstructured procedures and top-down versus bottom-up orientation.     

New Product Strategies of Large, Dominant Product Manufacturing Firms: An Exploratory Analysis

Although researchers have expended considerable effort exploring the links between new product strategy and firm-level performance, most studies of this subject focus on small- to medium-sized firms. Compared to smaller firms, however, large companies typically maintain broader portfolios of products and have easier access to capital markets. Such fundamental differences suggest the need for closer examination of the relationship between new product strategy and the performance of large firms. Based on a study of 459 new products introduced during a 5-year period, Richard W. Firth and V. K. Narayanan profile the new product strategies of 18 large companies. They examine the methods used to acquire new products (internal development or external sources) as well as three dimensions of each firm's new product introductions: newness of embodied technology, newness of market application, and innovativeness in the market. In other words, these profiles identify the degree to which a firm's new product introductions involve core technologies and markets that are new to the firm, as well as the degree to which the market views these products as innovative. Because new product strategy is an investment decision, the study also examines the relationship between these strategic profiles and two facets of firm-level performance: risk and return. The study identifies five archetypes of new product strategy: Innovators, who produce innovative products by using their existing resources; Investors in Technology, who focus on expanding their technological base. Searching for New Markets, firms that venture into unfamiliar markets by introducing products closely aligned with those in their existing portfolios; Business as Usual, firms that rely on existing technologies and products to serve existing markets; and Middle-of-the-Road, firms content to introduce new products rated as low to moderate along all three dimensions of the strategic profile. For new products closely aligned with their core markets and technologies, the firms in this study typically rely on internal development. To introduce products involving new technologies or market applications, they turn to acquisition from external sources. Firms that emphasized market innovativeness in their new product introductions enjoyed higher returns than less innovative firms. And contrary to conventional wisdom, they gained this advantage without an accompanying increase in risk. In other words, continual innovation might provide a large firm with the means for achieving higher returns without higher risk.     

产品价值网络竞争与后发企业追赶策略北大核心

市场环境的复杂引致产品竞争转变为产品价值网络之间的竞争,后发企业的追赶能力依赖于产品价值网络的竞争力。本文基于博弈理论构建了包含后发企业新产品价值网络和在位企业旧产品价值网络的防降价均衡模型。通过数理推导产品价值网络各主体在降价博弈中的行为选择,进而分析后发企业为引导其他主体协同跟进、成功构建和运营新产品价值网络的策略安排。研究表明后发企业应该:(1)提高与模块供应商、互补品提供商的兼容度;(2)提高新旧产品的兼容度;(3)根据市场份额调整产品价格;(4)根据用户规模把控补贴额度和时间节点。研究结论为后发企业通过产品价值网络竞争实现追赶提供了重要见解。最后,结合华为鸿蒙系统案例分析了后发企业追赶策略的实际应用。     

Strategic Mutual Learning Between Producing and Buying Firms During Product Innovation

The product innovation activities and strategies employed by successful innovators often differ from those used by firms having more mature products. Marketing strategies for innovating firms can vary along two dimensions of knowledge: technological development (stable and evolving) and market needs (known and emerging). In addition, producers often commit to forms of strategic relationships with their buyers because of the difficulties encountered when buying firms adopt and implement technological innovations. Starting with these two orienting constructs from the literature, Patricia Meyers and Gerard Athaide describe the kinds of learning that develop between producers and buyers when markets for a technological innovation are forming.     

产品差异竞争:广告、品牌和服务

差异性使消费者对不同企业的产品有着不同的偏好,进而形成和维持顾客的忠实度,降低产品的可替代性.产品差异化是一种重要的竞争模式,形成、保持和发展差异化是需要成本支持的.本文重点讨论产品的显性差异,包括广告、品牌和服务,因为这些差异化可以在瞬间影响消费者的偏好和决策,从而将产品的差异程度"植入"消费者的意识系统中.     

Evolving Toward Product and Market-Orientation: The Early Years of Technology-Based Firms

Research studies of 114 technology-based firms within the Greater Boston area indicate evolution over the first several years after founding toward more product-oriented businesses and away from consulting and R&D contracting, and increased orientation of the founders to sales and marketing, with lessened emphasis on engineering. In this article Edward Roberts reports that the character of many of these firms changes over time. Evolution toward market-orientation is manifested in many ways. Firms' use of direct sales forces and sales representatives grows over time, as does their adoption of more formal mechanisms such as marketing departments, sales forecasting and analyses of potential markets. Greater orientation toward marketing in all its dimensions is especially true for multifounder firms, the single founder company being slower to evolve in the characteristics cited.     

Do Firms Need a Custom-Designed New Product Screening Model?

Organizations have traditionally taken a variety of approaches to screening new product ideas. The use of a formal evaluation process to support screening decisions can reduce the costs and risks associated with product development. Although making good new product choices is vital, many managers have not applied analytical screening models because these models have not been customized to reflect the particular character of their firm and industry. In a study of how managers from different types of companies screen new product proposals, Ulrike de Brentani finds that the essential criteria determining new product selection do not differ radically among firms. This indicates that managers can potentially benefit from applying an existing formal evaluation model that encompasses the critical factors generally applied when making new product evaluation decisions, even if that model has not been customized for their specific application.