TY - JOUR
T1 - Two state capital accumulation with heterogenous products
T2 - Disruptive vs non-disruptive goods
AU - Caulkins, J.P.
AU - Feichtinger, G.
AU - Grass, D.
AU - Hartl, R.F.
AU - Kort, P.M.
PY - 2011
Y1 - 2011
N2 - The paper considers the problem of a firm that, while producing a standard product, has the option to introduce an innovative product. The innovative product competes with the standard product and will therefore reduce revenues of the standard product. A distinction is made between innovative products that do or do not become even more relatively appealing as their market share grows (e.g., because of network externalities). It is shown that in the former case, which we call a “disruptive” good, history dependent long run equilibria can occur, which are in line with recent real life economic examples.
AB - The paper considers the problem of a firm that, while producing a standard product, has the option to introduce an innovative product. The innovative product competes with the standard product and will therefore reduce revenues of the standard product. A distinction is made between innovative products that do or do not become even more relatively appealing as their market share grows (e.g., because of network externalities). It is shown that in the former case, which we call a “disruptive” good, history dependent long run equilibria can occur, which are in line with recent real life economic examples.
M3 - Article
SN - 0165-1889
VL - 35
SP - 462
EP - 478
JO - Journal of Economic Dynamics & Control
JF - Journal of Economic Dynamics & Control
IS - 4
ER -