Technological adoption and use after mass market displacement: The case of the LP record

This paper investigates the reasons why some technologies, defying general expectations and the established models of technological change, may not disappear from the market after having been displaced from their once-dominant status. Our point of departure is that the established models of technological change are not suitable to explain this as they predominantly focus on technological dominance, giving attention to the technologies that display highest performance levels and gain greatest market share. And yet, technological landscapes are rife with technological designs that do not fulfil these conditions. Using the LP record as an empirical case, we propose that the central mechanism at play in the continuing market presence of once-dominant technologies is the recasting of their technological features from the functional-utilitarian to the aesthetic realm, with an additional element concerning communal interaction among users. The findings that emerge from our quantitative textual analysis of over 200,000 posts on a prominent online LP-related discussion forum (between 2002 and 2010) also suggest that the post-dominance technology adopters and users appear to share many key characteristics with the earliest adopters of new technologies, rather than with late-stage adopters which precede them.     

Planned obsolescence and monopoly undersupply

This paper examines the welfare implications of planned obsolescence in situations where the traditional monopoly undersupply exists. We find that the monopolist’s introduction of incompatibility between successive generations of products alleviates the monopoly undersupply problem and may therefore generate higher social welfare than compatibility. Paradoxically, the stronger the network effects, the more likely welfare will increase as a result of incompatibility. Our result also extends to two-sided markets characterized by indirect network effects.     

Allocation,externalities, and building value

Externalities generally are viewed as impacting land values rather than building values. Yet when locational obsolescence is attributed to externalities, the implication is that externalities impact primarily on building values. The presence of negative externalities generally does not determine whether a building suffers from locational obsolescence; the more general cause is a misallocation of land. At the market allocation, there is no locational obsolescence even in the presence of an externality, while at the optimal allocation only an externality can produce locational obsolescence. Because locational obsolescence can exist without externalities, an externality is not a necessary condition for locational obsolescence. Because an externality can be present without accompanying locational obsolescence, an externality also is not a sufficient condition for the existence of locational obsolescence.     

国外计划报废理论研究综述

国外学者对计划报废理论早已开展了许多富有成效的研究;然而,在国内至今罕有相关方面的文献研究。因此,开展相关研究具有非常重要的理论和现实意义。首先,以iPod为例,引出了计划报废的概念和模型。然后分别从网络外部性与兼容性决策、耐用性决策、新产品引进、技术进步和研发决策等五个方面,对有关研究进行了综述。     

Bayesian networks for identifying incorrect probabilistic intuitions in a climate trend uncertainty quantification context

Abstract

Probabilistic thinking can often be unintuitive. This is the case even for simple problems, let alone the more complex ones arising in climate modelling, where disparate information sources need to be combined. The physical models, the natural variability of systems, the measurement errors and their dependence upon the observational period length should be modelled together in order to understand the intricacies of the underlying processes. We use Bayesian networks (BNs) to connect all the above-mentioned pieces in a climate trend uncertainty quantification framework. Inference in such models allows us to observe some seemingly nonsensical outcomes. We argue that they must be pondered rather than discarded until we understand how they arise. We would like to stress that the main focus of this paper is the use of BNs in complex probabilistic settings rather than the application itself.     

Learning by hiring and change to organizational knowledge: Countering obsolescence as organizations age

Research summary: This paper investigates the relationship between hiring and the ability of organizations to evolve their capabilities as they age. While prior research establishes that organizations become rigid to change as they age, it underemphasizes measures that they may take to renew their adaptive potential. I address this gap by investigating whether hiring stimulates change to the knowledge organizations possess. Learning by hiring, I argue, helps organizations to evolve their knowledge as they age by disrupting routine, introducing distant knowledge, and facilitating socialization. I test the effectiveness of these mechanisms using 38 years (1970–2007) of data from the U.S. biotechnology industry, and find that hiring stimulates more change as organizations age, enabling them to renew their knowledge and counter the effects of obsolescence. Managerial summary: As organizations age, they become less responsive to the needs of their environment, resulting in a trend for them to become technologically obsolete. Little is known as to how they may reverse this trend and counter obsolescence. I provide evidence that hiring may be used to stimulate change to organizational knowledge and capabilities as they age by disrupting routine activity, introducing new‐to‐the‐firm knowledge, and inducing incumbent members to learn. Copyright © 2015 John Wiley & Sons, Ltd.     

Does skill obsolescence increase the risk of employment loss?

In this article, we analyse whether technological change induces skill obsolescence and early labour market exit, and to what extent training participation and on the job learning reduce these risks. Using panel data on older workers, we find that workers report skill obsolescence more often when learning is a structural characteristic of the job. This perceived skill obsolescence is not related to a higher probability of losing employment. Instead, workers who experience skill obsolescence appear to learn more on the job and participate more often in training, which decreases the risk of losing employment. These results are consistent with the dynamic model of skill obsolescence and employment loss we develop in this article. Moreover, we find that when workers with long job tenures decrease their training participation, this is an early indicator of future job loss.     

R&D and product obsolescence

Claims of planned obsolescence have often been made by various consumer groups. Bulow (1986) examined a monopolist's choice of product durability and found that firms who sell their products tend to choose lower durability levels than firms that rent. We argue that the speed of new product development may be a more appropriate proxy for obsolescence than is durability. Reformulating Bulow's model in terms of R&D choice rather than durability choice, we find that sales firms engage in higher levels of R&D than do rental firms. Additionally, we provide an empirical example using data from the copier and computer industries which also suggests a strong positive relationship between the R&D intensity of a firm and the proportion of output sold versus rented.     

Boundaries of the firm: evidence from the banking industry

Agency theory implies that asset ownership and decision authority are complements. Using 1998 data from Texas commercial banks, we test whether the likelihood of local ownership of bank offices increases with the importance of granting local managers greater decision authority (for example, due to location or customer base). Our empirical evidence is consistent with this hypothesis. It suggests that complementarities between strategy and organizational structure can foster differentiation among firms in terms of location, customers, and products. It also supports the growing view that small locally-owned banks have a comparative advantage over large banks within specific environments.