credible spatial preemption it is often argued that incumbent firms may deter entry by preemptive investment in new goods we show that these conclusions are reversed when multiproduct incumbentfirms may exit in response to entry once entrants are in an industry an incumbent will often want to withdraw some goods to prevent competition with the entrant from reducing profits on other goods such a reaction makes entry more attractive to a potential entrant the equilibrium industry structure is less likely to be monopolistic as the goods are better substitutes as exit costs are low and as the competition between producers of the same good is more intense

dynamic game results of the acquisition of new technology open and closed loop nash strategies are derived and analyzed for a differential game in which two competing firms choose prices and productive capacity where new technology reduces a firm s unit operating cost using an open loop strategy a firm makes an irreversible commitment to a future course of action for example a contract with a labor union may force a firm to commit to maintaining its entire workforce regardless of its competitor s future realized behavior in contrast using a closed loop strategy a firm s decisions evolve over time continuously responding to the competitor s behavior the dynamic nash strategies obtained for the closed loop model exhibit a more restricted acquisition of new technology and a greater reduction of existing capacity relative to the open loop solutions in addition the dynamic nash price to be charged for output is higher in the closed as opposed to open loop competitive environment numerical solutions are presented to demonstrate that if both firms apply the closed loop approach each will earn higher profits than if one or both firms choose an open loop strategy

material flow analysis of the forest wood supply chain a consequential approach for log export policies in france part of the french timber transformation industry suffers from difficulties to adapt to recent changes on global markets this translates into net exports of raw wood and imports of transformed products detrimental to both the trade balance and the local creation of wealth at the same time no consistent and homogeneous accounts for wood product production and consumption exist at this time this article first aims at objectifying this situation by undertaking the first material flow analysis of the french forest wood supply chain we then evaluate the potential consequences of various scenarios of raw wood exports reduction policies namely subsidies for consumption or transformation and taxation of exports on both economic outcomes for the different actors and material flows we thus provide an example of coupling material flow analysis with economic modeling in an attempt to move from the diagnostic phase to the assessment of possible actions within a decision making perspective

technological expectations and adoption of improved technology abstract attention is focused upon the adoption demand rather than the creation supply of new technology which improves from time to time based on the expected flow of technological progress over which the firm demander has no control it must decide either to adopt the current best available technology or to postpone adoption the distinguishing features of the model are that more than one technological innovation is anticipated and expectations about the likelihood of such innovations are revised as time passes since the last innovation our analysis shows that the firm will adopt the current best practice if its technological lag exceeds a certain threshold moreover as time passes without new technological advances it may become profitable to purchase a technology that has been available even though it was not profitable to do so in the past

stimulating fuelwood consumption through public policies an assessment of economic and resource impacts based on the french forest sector model abstract stimulating renewable energy is a crucial objective in view of tackling climate change and coping with future fossil fuel scarcity in france fuelwood appears to be an important source for the renewable energy mix using the french forest sector model our paper aims to assess the impacts of three policy options to stimulate fuelwood consumption a consumer subsidy a producer subsidy and a fixed demand contract policy we explored their impacts in terms of five groups of criteria 1 forest resource dynamics 2 variations in wood products prices and quantities consumed and produced 3 trade balance 4 budgetary costs and 5 variations in agent surpluses we show that no policy option is more desirable than another on the basis of all of these criteria and that trade offs will determine which is the best policy option to be implemented

uncertainty competition and the adoption of new technology faced with the decision of whether or not to adopt a new technology whose economic value cannot be gauged with certainty the manager of the firm may elect to decrease the uncertainty by sequentially gathering information at a unit cost of c 0 updating his prior beliefs in a bayesian manner uncertainty regarding the actions of a competitor however cannot be reduced our model allows a manager to account for potential competition either substitute or complementary by inclusion of strategic considerations modelled in a game theoretic setting we show that the firm s best response mapping satisfies a dynamic programming recursion even when the one period reward function is unbounded providing management with a familiar tool to solve its problem best response behavior is characterized by a monotone sequence of pairs of threshold numbers which give rise to a cone shaped continuation region the continuation region is shown to shift up down with increases in the expected level of substitute complementary competition making the firm less more likely to adopt the innovation finally the existence of a nash equilibrium in cone shaped strategies is established

is it a car or a truck managerial beliefs the choice of product architecture and the emergence of the minivan market segment new markets segments are a common setting for studies in technology strategy these studies generally assume that new segments already exist or have formed following the introduction of a product innovation by an entering firm thus theory on the role of established firms in the emergence of new market segments is underdeveloped this study informs current research by explaining the product innovation decisions of established firms during the emergence of a new market segment the results of a case study on the development and commercialization of the minivan at chrysler ford and general motors between 1970 and 1985 indicate that existing theories based on managerial cognition firm capabilities economic incentives and organizational structure are insufficient to explain the decisions this article develops theory based on the interrelationship of these four mechanisms

spatial and temporal flows of china s forest resources development of a framework for evaluating resource efficiency abstract population growth and resource scarcity have remained major constraints on china s development for several decades under conditions of resource limitations utilization efficiency is a key concern for chinese scientists and decision makers based on forest production and trade data for china we present a conceptual framework for resource flow analysis calculate the quantities and analyze the characteristics of flows of forest resources primarily wood and wood byproducts during the critical early economic development of china from 1953 to 2000 by converting the forest resource flows into log equivalents i e the quantity of logs required to generate a unit of each type of product the consumption of forest resources has accelerated throughout the study period and the structure and efficiency of forest resource utilization have both improved the proportion of forest resource flows obtained from outside china has increased and most of this wood was consumed by wood processing industries over time consumption has shifted from logs and lumber to the pulp and paper and artificial board industries to improve the economics and sustainability of its use of forest resources china should increase consumption of forest resources by its pulp and paper industry more fully utilize forest resources obtained from outside china and weaken the dependence on these foreign forest resources by promoting increased utilization efficiency and structural readjustment of the forest industry therefore improved forest management is an effective mean of weakening the dependence on foreign forest resources

if tropical log export bans are so perverse why are there so many abstract a substantial number of tropical timber owning nations have enacted bans or similar provisions constraining the export of crude logs job creation capturing value added and improving the efficiency of domestic processing are often given as reasons for such bans however neoclassical economics finds such bans uneconomic and development agencies often support their repeal this paper examines this contradiction and offers reasons why a log export bans are defensible in certain realistic circumstances and b certain theoretical arguments against log export bans often lack relevance

capital as a commitment strategic investment to deter mobility abstract this paper analyzes how an early entrant in a market can exploit its head start by strategic investment the analysis is based on spence s paper investment strategy and growth in a new market bell j econ 10 1979 1 19 we frist study the investment game in the no discounting case which embodies the key features of mobility deterrence we establish the existence of a set of perfect equilibria and suggest that one particular equilibrium is most reasonable this equilibrium also valid with discounting involves the follower firm being forever deterred from investing to its steady state reaction curve in contrast to spence s proposed solution

pioneers marketing mix reactions to entry in different competitive game structures theoretical analysis and empirical illustration pioneers marketing mix reactions to new entries are recognized as important determinants of the outcome of pioneerlate mover competition particularly in price inelastic markets such as those for pharmaceuticals cigarettes and luxury goods managers in such markets are interested in better understanding when to accommodate i e decrease marketing spending or retaliate i e increase spending in nonprice marketing variables such as advertising and salesforce in addition the reallocation of marketing resources toward advertising indicated by a pull strategy or salesforce indicated by a push strategy upon entry is strategically important to managers previous theoretical research shows that pioneers should retaliate in both static and growing markets results from empirical research are mixed in that they support both accommodation and retaliation in growing markets empirical research also shows that a pioneer accommodates retaliates with its low high elasticity marketing mix variable contrary to prior research however some pioneers have successfully accommodated late movers in growing markets and in some cases have accommodated with their stronger marketing mix variables and also retaliated with their weaker marketing mix variables for example bristol myers squibb s capoten accommodated the entry of merck s vasotec in the growing ace inhibitors market with its more powerful variable salesforce but also retaliated with its less potent variable advertising moreover not much is known about how the pioneer s marketing mix allocation should change i e toward pull vs push strategies in response to new entries we seek to better explain the pioneer s reactions and predict its shift in marketing mix allocation upon new entry we note that prior research s predictions on the pioneer s reactions are based on a limited number of key factors such as product market characteristics and the pioneer s elasticities prior to a new entry in this paper we extend previous research by adding two other critical factors namely the impact of new entry on the pioneer s elasticities and margin and different competitive game structures to better predict and explain the pioneer s reactions we develop analytical results on the pioneer s reactions in price advertising and salesforce in different competitive games both nash and different leader follower games in these results we identify the conditions under which the pioneer should accommodate or retaliate or not react to a late mover s entry and shift its marketing mix allocation toward pull versus push strategies we empirically illustrate some of the analytical results using data from a pharmaceutical category we show that a pioneer who adopts a follower leader role with respect to a marketing mix variable in a static growing market and witnesses a decrease an increase in own elasticity and margin upon a new entry generally should accommodate retaliate in that variable however we are also able to show that there are cases where these general reactions don t hold thus for example it is possible for a pioneer to find it optimal to accommodate in a growing market or to retaliate even when its elasticity decreases upon entry depending on the combination of competitive game the impact of entry on elasticities and margin and market growth in this way our results point to the fact that it is necessary to look not only at one factor at a time but instead examine the combination of all the factors we explain the empirical support for both accommodation and retaliation in growing markets by showing that the pioneer should accommodate retaliate a late mover with its competitively low high elasticity marketing mix variable competitively high low elasticity variables are not are likely to be significantly reduced by a new entry in the anticipated competitive game with regard to reallocation of the pioneer s marketing mix we show that the change in the pioneer s marketing mix allocation should follow the change in the relative marketing mix effectiveness after new entry this in turn depends on the structure of competition the impact of the late mover on its elasticities and margins and the competitor s marketing mix elasticities in addition to own elasticities the results can guide managers on how factors such as competitive structure changes in elasticities and margin and market growth impact the pioneer s marketing mix decisions and on when to accommodate retaliate or not react to a late mover s entry and shift marketing mix allocation toward pull versus push strategies

intrafirm competition and charter evolution in the multibusiness firm we develop a theoretical framework for a specific form of intrafirm competition namely the extent of overlap between the charters of two or more units in a single organization this phenomenon is commonly seen in large organizations e g cases of two business units producing competing products or two product development groups trying to solve the same technological problem but the existing academic literature provides little insight into the forms intrafirm competition takes or the conditions under which it is beneficial or harmful to the organization building on the concept of an organization charter galunic and eisenhardt 2001 we identify two generic forms of intrafirm competition the dynamic community model has fluid and frequently changing charter boundaries and it emerges through the creation of strategic options in the face of a changing environment the coexistence model has fixed and relatively static charter boundaries and it owes its existence to economies of scope and differentiation of unit charters to cover multiple market segments in the body of the paper we develop a theoretical framework to specify the environmental and organizational conditions under which each form of intrafirm competition is expected to occur

are technology intensive industries more dynamically competitive no and yes a substantial body of research in management and related public policy fields concludes that recent decades saw greater dynamic competition throughout technology intensive ti industries with widespread steady increase in ti industry and business performance instability as key implications we set this conclusion within a broader framework of purportedly increasing dynamic competition among ti industry businesses and then test for evidence of its performance implications in a large sample of u s businesses operating from 1978 to 1997 in 31 industries with high average research and development expenditure to sales ratios in the full sample we find no evidence of sustained increase in ti industry and business performance instability nor any evidence of significant cross sectional differences in performance instability between ti and non ti industry businesses over these 20 years for a small segment of very high performing businesses from ti industries however we do uncover evidence of declining performance stability and cross sectional differences in performance stability we conclude that assumptions of widespread long term increase in dynamic competition lack robust evidentiary support it is premature to embrace and apply broadly new theoretical perspectives management practices and public policies to ti industry competitive dynamics that may be slightly changed since the late 1970s yet there may be increasing dynamic competition among very high performing ti industry businesses in that small realm careful application of new perspectives practices and policies may lead to deeper insight on business behavior and performance in ti industries

eating your own lunch protection through preemption recent discussions of management practices among successful high technology companies suggest that one key strategy for success is to eat your own lunch before someone else does the implication is that in intensely competitive or hypercompetitive markets firms with a leading position should aggressively cannibalize their own current advantages with next generation advantages before competitors step in to steal the market given the pace of technological and other types of change such strategy often requires creating next generation advantages while the current advantages are still profitable that is trading current profits for future market leadership we capture the tradeoff between a market leader s willingness to reap profits with its current set of advantages and its desire to maintain market leadership by investing in the next generation using a competitive model that determines the equilibrium launch time of a next generation advantage we find that in absence of lower launch costs for an

comments on money is privacy by charles kahn james mcandrews and william roberds monetary theory and game theory three classes of models on money closely related to game theoretic models are i search theoretic models ii repeated games in a narrow sense and iii trading post games this note tries to point out the sense of affinity between the theory of microfoundations of money and the theory of repeated games in a broad sense of the term

downscaling material flow analysis the case of the cereal supply chain in france the spatial reconstruction of the production trade transformation and consumption flows of a specific material can become an important decision help tool for improving resource management and for studying environmental pressures from the producer s to the consumer s viewpoint one of the obstacles preventing its actual use in the decision making process is that building such studies at various geographical scales proves to be costly both in time and manpower in this article we propose a semi automatic methodology to overcome this issue we describe our multi scalar model and its data reconciliation component and apply it to cereals flows namely using ocial databases insee agreste franceagrimer sitram as well as corporate sources we reconstructed the supply chain flows of the 22 french regions as well as the flows of four nested territories france the rhone alpes region the isere departement and the territory of the scot of grenoble we display the results using sankey diagrams and discuss the intervals of confidence of the model s outputs we conclude on the perspectives of coupling this model with economic social and environmental aspects that would provide key information to decision makers

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

technological platforms and diversification as the invention of fundamental new sciences spawns subsequent research discovery and commercialization core technologies branch into new applications and markets some of them evolve over time into many derived technologies whereas others are essentially dead ends the pattern of evolution and branching is called a technological trajectory an intriguing question is whether some firms can ride the trajectory by developing proprietary experience in a platform technology because the knowledge is proprietary firms that originate in industrial fields based on a platform technology acquire the technological skills to diversify and to mimic the branching of the underlying technological trajectory the ability to compete in hypercompetitive markets depends on the acquisition of know how that is applicable to a wide set of market opportunities such capabilities serve as platforms into quickly evolving markets to respond rapidly to market changes a firm must have already acquired fundamental compet

the japanese beer wars initiating and responding to hypercompetition in new product development in the mid 1980s the japanese beer industry a stable oligopoly in which competition had traditionally been limited to well understood nonprice dimensions experienced an outbreak of new product hypercompetition which saw a ten fold increase in the industry s new product introduction rate produced a major shake up in firms competitive positions and forced firms to transform themselves in fundamental ways in order to compete effectively surprisingly this hyper competition occurred despite heavy government regulation of the industry driving it were a variety of demographic dietary social economic and distribution trends which affected demand for beer plus the existence of a major player asahi on the edge of bankruptcy and therefore sufficiently desperate to risk a frontal attack on the industry leader kirin at the firm level substantial internal change and the building of new organizational capabilities were required both to initiate and respond to hypercompetition examining in detail th

information acquisition and the adoption of new technology the profitability of a new technology is rarely known with certainty at its announcement date consequently prior to making an adoption decision it behooves the firm considering the adoption of this innovation to reduce the level of uncertainty associated with its profitability the firm accomplishes this by sequentially gathering information updating its prior estimate of profitability in a bayesian manner quantifying the uncertainty regarding the innovation permits application of dynamic programming techniques criteria are derived which tell the firm when to stop collecting information and make the adoption decision it will be shown that it is optimal for the firm to continue to collect information until its estimate of profitability crosses one of two thresholds upon crossing the upper threshold the firm adopts the technology whereas the firm rejects the technology if the lower threshold is crossed the model predicts that even the manager who behaves optimally will occasionally adopt unprofitable technologies and reject profitable ones

new organizational forms and strategies for managing in hypercompetitive environments strong forces of change globalization demographic shifts e g aging population and declining fertility rates advances in information technology demassification of society and hypercompetition are reshaping the competitive landscape worldwide as a result companies in most industries are not only undergoing rapid and radical change but are also experiencing a fundamental shift in the rules of competition and the way the game of competition is played the old genteel stable oligopolies that defined competition during the 20th century are rapidly restructuring in their place are emerging markets fraught with uncertainty diverse global players rapid technological change widespread price wars and seemingly endless reorganization that transition is occurring not only in the united states but also in europe latin america and asia in this issue we demonstrate that as predicted by those early researchers a dramatic and far reaching shift has occurred in the nature of competition in most ind

entry deterrence by timing rather than overinvestment in a strategic real options framework this paper examines a dynamic incumbent entrant framework with stochastic evolution of the inverse demand in which both the optimal timing of the investments and the capacity choices are explicitly considered we find that the incumbent invests earlier than the entrant and that entry deterrence is achieved through timing rather than through overinvestment this is because the incumbent invests earlier and in a smaller amount compared to a scenario without potential entry if on the other hand the size of the investment is exogenously given the investment order changes and the entrant invests before the incumbent does

market incumbency and technological inertia this paper uses a case study and a simple mathematical model to study the link between the incumbency and incentives to innovate and introduce drastically new products it identifies the conditions under which fears of self cannibalization are particularly likely to lead incumbents to soft pedal such innovations

note on self restraint as an online entry deterrence strategy we develop a game theoretical model to show that in the markets where price consistency across channels is critical an incumbent brick and mortar retailer can deter the online entry of a pure play e tailer by strategically refraining from entering online in the markets where price consistency is not a constraint we find that the incumbent can deter the e tailer s entry only if it enters online and credibly operates the online channel as an independent profit center in other words the incumbent must be willing to cannibalize its own brick and mortar business by charging a low online price we also discuss some social welfare implications of retail online entry and the managerial insights of our analysis