a profile of new venture success and failure in an emerging industry abstract this study examined three types of factors 1 the characteristics of the lead entrepreneur 2 startup processes undertaken during the founding of the firm and 3 firm behaviors after start up including management practices and strategic behaviors associated with new venture success and failure the research involved a field study of 26 small young firms 13 successful and 13 less successful or failed each engaged in the distribution of fresh juices in eight metropolitan centers about 30 of the total market in the united states both quantitative and qualitative data were collected through field work at each firm location a statistical analysis of data collected in a structured questionnaire was the primary method for testing the factors case studies of all of the firms were developed to provide qualitative support for the quantitative findings of the study results from these analyses indicated significant differences between successful and unsuccessful firms in all three categories lead entrepreneurs in successful firms were more likely to have been raised by entrepreneurial parents have had a broader business and more prior startup experience and believed they had less control of their success in business than unsuccessful entrepreneurs successful entrepreneurs seek to reduce risk in their businesses they work long hours have a personal investment in the firm and are good communicators successful firms were those initiated with ambitious goals lead entrepreneurs had a clear broad business idea which provided the adaptive torque required to overcome adversity confrontation and often a troubled financial condition effective startup or purchase required broad planning efforts that considered all aspects of the industry and firm successful firms spent more time planning 237 hours than unsuccessful firms 85 hours the use of outside professionals and advisors for help in solving specific problems during startup was important for success as well as the advice and information provided by other industry participants particularly customers and suppliers most ventures did not have written business plans nearly all purchased firms failed buyers of competitively troubled firms were negatively displaced generally unemployed managers who lacked broad management experience and while often well educated had no prior experience in purchasing a business successful firms were found to be more flexible participative and adaptive organizations these firms had employees who could perform the work duties of others and were likely to be managed in a way that provided these workers with the flexibility to modify their jobs to adapt to changing industry and organizational conditions lead entrepreneurs of successful firms were likely to spend more time communicating with partners customers suppliers and employees than the lead entrepreneurs of unsuccessful firms successful firms sought to become larger firms and embarked upon sales to broad sectors of the market successful firms achieved high market shares with market shares came higher financial returns less successful firms were restricted to narrow market sectors consisting of smaller customers and those more difficult to service while customer service remained an important concern the commodity nature of fresh juices failed to support differentiation and the narrowly focused firm was typified by high product costs and unprofitable operations

analysis of new product diffusion using a four segment trial repeat model a four segment trial repeat model is developed to model sales of a frequently purchased product in the early stage of the product s life cycle the model can be calibrated using aggregate data alone two versions of the model one emphasizing the competitive aspect of marketing communications and another emphasizing the informative aspect are estimated from data on 21 newly launched pharmaceutical products the model provides valuable diagnostics such as an early estimate of the long run market share of the new product a decomposition of total sales into trial sales due to marketing activities trial sales due to word of mouth and repeat sales the changing composition of the trial market and repeat market over time and the time when the trial market is expected to be saturated in addition the effectiveness of the entrant s marketing efforts word of mouth communication and buyers trial experience are analyzed with the model a cross sectional analysis based on the empirical estimation results of our model reveals interesting insights into product introduction strategies we find that 1 the effectiveness of the firms communication activities on trial is related mainly to product quality attributes and market growth whereas that of word of mouth is associated with product class characteristics and market competitiveness and 2 the effect of product trial on repeat purchases is related mainly to product quality attributes and various market characteristics such as size growth competitiveness and familiarity

a special case of dynamic pricing policy this article studies the implications of experience curves and brand loyalty for optimal dynamic pricing policy in a continuous time model we synthesize several results from the literature on open loop equilibria specifically we show that prices should decrease over time for high discount rates and steeper exogenous declines in variable costs conversely the prices should increase over time if experience curves affect fixed costs and if consumers are brand loyal

optimal dynamic marketing mix policies for frequently purchased products and services versus consumer durable goods a generalized analytic approach abstract this paper deals with the qualitative characterization of optimal pricing and advertising policies together with the optimal ratio of the advertising elasticity of demand to its price elasticity over time the problem is studied for frequently purchased products and services fps as well as consumer durable goods cdg in both monopolistic and duopolistic markets demand dynamics cost learning and discounting of future profits are taken into consideration in addition both the open loop and feedback methodologies are pursued to characterize and compare the derived optimal policies the paper uses an analytical approach to characterize the optimal dynamic policies in a general setting as is mathematically tractable followed by the analysis of more specific models to gain additional managerial insights while maintaining a certain degree of generality optimal fps marketing mix policies are shown to be different from their cdg counterparts for both monopolistic and duopolistic markets while the ratio of advertising elasticity to price elasticity appears to have been governed by similar set of rules for fps and cdg the direction of change of such ratio over time looks different from each other managerial implications and directions for future research are also discussed

competitive pricing by a price leader we examine the problem of pricing in a market where one brand acts as a price leader we develop a procedure to estimate a leader s price rule which is optimal given a sales target objective and allows for the inclusion of demand forecasts we illustrate our estimation procedure by calibrating this optimal price rule for both the leader and the follower using data on past sales and prices from the mid size sedan segment of the u s automobile market our results suggest that a leader follower system stackelberg seems more consistent with the pricing behavior in this market than a mutually independent pricing rule nash we also find that our optimal price rule explains this market data better than other pricing schemes that do not account for optimizing behavior on the part of the leader and the follower

pricing and lot sizing polices for perishable goods when the demand depends on selling price displayed stocks and expiration date abstract price is a major factor on the demand based on marketing and economic theory in addition the demand for perishable products also depends on its freshness moreover it is a well known fact that increasing stock display e g fresh fruits vegetables baked goods may encourage consumers to purchase more this paper first proposes an inventory model that stipulates the demand explicitly in a multivariate function of price freshness and displayed stocks it may be profitable to have a closeout sale at a markdown price and always keep on hand displayed stocks fresh and plentiful if the demand is freshness and stock dependent hence the traditional assumption of zero ending inventories is relaxed to a non zero ending inventory as a result the objective is to determine three decision variables i e unit price cycle time and ending inventory level in order to maximize the total profit then it is demonstrated that the total profit is strictly pseudo concave in those three decision variables which reduces the search for solutions to a unique local maximum finally numerical examples to illustrate the theoretical results and to highlight managerial insights are presented

national price levels purchasing power parity and cointegration a test of four high inflation economies abstract the time series properties of exchange rates and wholesale prices from four high inflation countries show some evidence in support of purchasing power parity tests for stationarity of real exchange rates and cointegration among price and exchange rate variables are presented for argentina brazil chile and israel during the 1970s and 1980s error correction models describe the mechanism of adjustment to long run equilibrium

optimal strategies for general price quality decision models of new products with learning production costs abstract the question of product quality permeates every level of business and is becoming crucial for the survival of modern manufacturing firms in automotive and high tech industries in this paper we deal with the optimal price and quality policies for the introduction of a new product on the supply side the firm wants to determine the unit price and quality level over time given that unit cost declines along a learning curve and increases if quality is made greater on the demand side dynamic demand is related to price and quality as well as to cumulative sales which represent diffusion and saturation effects we will model this problem in a general framework that includes several previous results as special cases by applying the maximum principle we will derive the optimal price and quality policies and discover the interactions between these two major strategic marketing instruments and the diffusion process several fundamental theoretical results will be established for the model under certain specified conditions higher prices do imply higher quality and under other conditions the optimal price declines over time while the product quality improves to illustrate these results the theoretical results are applied to two specific cases the first one is a simple nonseparable demand growth function in price and quality the other is a separable demand function of price and quality

joint stochastic dynamic pricing and advertising with time dependent demand abstract this paper examines the sale of a finite number of items in a class of stochastic dynamic pricing and advertising models with time dependent demand elasticities we prove structural properties of the optimal expected profits with respect to time inventory level price impact advertising impact and different model parameters such as discount rate marginal unit costs and holding costs we find that the value of an additional item opportunity costs is decreasing in the unit costs the discount rate the holding cost rate and the number of items left to sell we also derive structural properties of optimal joint pricing and advertising strategies this way we obtain general qualitative insights in the complex interplay and the mutual dependence of optimal pricing and advertising decisions among other properties we show that a higher advertising impact leads to higher optimal prices and lower advertising rates which in turn implies a lower speed of sale the results obtained help practitioners to respond to changes in market conditions by adjusting price and advertising accordingly our results allow speeding up numerical computations of decisions as the set of possible actions can be reduced significantly our analysis implies general results for pure pricing as well as pure advertising models with time dependent demand elasticities

user industry spinouts downstream industry knowledge as a source of new firm entry and survival recent scholarship on entrepreneurship suggests that the pre entry know how of start ups embodied in their founders affects not only entry but also performance although prior work focuses on new entrants from the focal industry i e employee spinouts and academic organizations i e university spinoffs this study identifies and examines a hybrid category of start ups from downstream user industries which we call user industry spinouts we draw from the literature on evolutionary theory user innovation and industrial dynamics to propose that given the unique combination of knowledge inherited by these entrants their choices at entry and their ability to survive in the focal industry will differ with respect to other start ups we do this by extending existing work on new firm creation to investigate entry and performance in different product markets our findings based on a dataset of start ups in the semiconductor industry over a 10 year period 1997 2007 show that user industry spinou

impact of ownership on the international involvement of smes this paper analyses the relationship between the internationalisation strategies of smes and types of ownership different types of ownership affect firms and this in turn will influence the internationalisation strategy adopted using a sample of spanish smes our results show that internationalisation is negatively related to family ownership and positively related to corporate ownership we have also observed that the presence of a corporate blockholder in family firms encourages internationalisation these results support the idea that ownership type influences the decision to internationalise

competitive advantages in new corporate ventures the impact of resource sharing and reporting level abstract ideally new ventures born into a corporation s family of existing businesses have a wealth of established resources to successfully draw upon such new corporate ventures do not have to reinvent every wheel there are already marketing programs and plants in place as part of the existing business operations and they should be able to piggyback upon these likewise the managers from across the corporation already have established a brand name and gained important experience in dealing with customers and the new venture should get to ride on these coattails however along with these benefits come costs that may be more than offsetting corporations may try to force the new venture into the established way of doing things in the name of efficiently utilizing existing resources perhaps the new venture will be hamstrung by an effort to coordinate its development with the ongoing operations of the corporation s established businesses it is not at all clear that sharing corporate resources is always a good thing for new corporate ventures some have argued that for new ventures to be successful they often need the direct involvement of top management to see that they get the benefits of corporate resources without suffering the costs this suggests the general hypothesis underlying much of this work reporting to top management will be especially beneficial to new corporate ventures heavily involved in sharing corporate resources in considering this idea we explore the complicated relationship between resource sharing top management involvement and the ability of new corporate ventures to establish a competitive advantage we consider both the relative overall quality and relative production costs as forms of competitive advantage we find that in new corporate ventures heavily involved in resource sharing achieving either of these advantages is highly contingent upon the level of corporate management to which the new venture regularly reports in ventures heavily involved in resource sharing reporting to top ranking managers appears to be beneficial in terms of controlling cost but detrimental in terms of the new venture s overall relative quality in other words when it comes to benefiting from shared corporate resources reporting directly to top management is apparently a two edged sword offering both benefits and costs reporting level appeared to make little difference in new ventures not involved in corporate resource sharing and competitive advantage is complex and counter to some existing theories new theoretical arguments are needed to explain the empirical results we develop three such theories all appropriate for further empirical examination

a dynamic model of manufacturing quality s effect on optimal advertising and pricing policies abstract this paper deals with the determination of optimal advertising and pricing policies when the influence of manufacturing quality on sales ra considered research to date has focused on the effect of advertising and pricing independently on the sales rate of a product under a variety of product and market conditions these studies have not considered the effect of product quality an important component of competitive strategy we develop a dynamic model to maximize discounted profits over a planning horizon in which sales rate is dependent on price advertising and product quality using standard methods of optimal control theory we characterize qualitatively the nature of optimal advertising quality and pricing policies under a variety of conditions

corporate venturing and value creation a review and proposed framework abstract over the past decade companies worldwide have used corporate venturing cv as a means of revitalizing their operations building new capabilities and achieving strategic renewal creating value for shareholders business interest in cv has stimulated academic interest in the topic resulting in a rapidly growing but fragmented body of literature despite the growing international scholarly interest in cv researchers have devoted little effort to integrating prior findings in a cumulative fashion as a result studies do not build upon one another making it difficult to gauge the progress being made in addressing the fundamental research questions related to cv in this paper we examine the literature on cv seeking to synthesize integrate and link its key findings to do so we analyze this literature over the past decade to identify its major themes and research findings setting the stage for greater coherence in future research on cv we give special attention to the challenges and rewards of theory building in future cv research our review clearly shows that cv is an area of scholarly inquiry that has important implications for managerial practice

modeling multiattribute utility risk and belief dynamics for new consumer durable brand choice this paper proposes a brand choice model to aid in the prelaunch management of a new consumer durable entry in an existing category the model contributes to theory by integrating the critical phenomena of multiattribute preference risk and dynamics in an individual level expected utility framework the integration is based on established theoretical constructs in utility bayesian decision analysis and discrete choice theory measurement and estimation procedures are presented an application is described and the managerial relevance of this work as a planning and forecasting tool is examined

price competition and compatibility in the presence of positive demand externalities in many cases the benefit to a consumer of a product increases with the number of other users of the same product these demand interdependencies are referred to in the literature as positive demand externalities or network externalities this paper examines the dynamic pricing behaviors of an incumbent and a later entrant with special attention to the impacts of demand externalities compatibility and competition on prices and profits defining market power as the ability to price above a competitor without losing market share we show how demand externalities and installed base combine to confer market power we model optimal pricing as a differential game with the optimal price trajectory established as nash open loop controls for a duopoly durable goods market with strong demand externalities the results show an increasing price trajectory can be optimal as expected a new entrant is better off if its products are compatible with those of the incumbent especially when demand externalities are strong and the installed base of the incumbent is large less intuitively the incumbent as well may be better off agreeing on common standards the comparison of monopoly and duopoly shows that under strong demand externalities and a small installed base the incumbent profits from compatible entry

purchasing power parity a quantitative reassessment of the 1920s experience abstract the purpose of this paper is to test the hypothesis of purchasing power parity the basic methodology is to start by estimating a general distributed lag equation relating the excchangr rate to its own past and to current and past relative price levels successively more restricted version are then proposed and tested against the general model two interesting facts come out of this one is that the proportionality restrictin is not supported by the data and the other is that all the models estimated by frenkel 1978 are rejected in favor of less restricted models

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

the process followed by ppp data on the properties of linearity tests recent research has reported the lack of correct size in stationarity test for ppp deviations within a linear framework however theoretically well motivated nonlinear models such as the estar appear to parsimoniously fit the ppp data and provide an explanation for the ppp puzzle employing monte carlo experiments we analyze the size and power of the nonlinear tests against a variety of nonstationary hypotheses we also fit the estar model to data from high inflation economies our results provide further support for estar specification

investigating the sensitivity of equilibrium profits to advertising dynamics and competitive effects the author investigates the validity of the flat maximum principle the insensitivity of a firm s profits to changes in its optimal advertising level in a duopolistic market in which advertising by the two firms has carryover effects two alternative competitive scenarios are examined i in which total industry sales are allowed to vary over time and ii where firms are engaged in market share rivalry for i the open loop nash equilibrium advertising strategies for the firms are derived assuming a specific sales response function and an infinite time horizon a numerical analysis of the sensitivity of firms profit functions to advertising expenditures is performed at different levels of the a discount rate b advertising elasticity and c advertising decay rate an empirical illustration from the pharmaceutical industry is provided special cases of the model formulation are examined analytically in order to highlight the intuition behind the flatness of the maximum and to study the sensitivity of results obtained to choice of equilibrium strategy closed loop vs open loop for the market share game closed loop policies are considered and the flat maximum principle is illustrated in the context of coke pepsi rivalry in the soft drinks market

an examination of the influence of industry structure on eight alternative measures of new venture performance for high potential independent new ventures abstract this study examined the influence of the structure of new ventures entered industries on eight alternative measures of new venture performance for 199 high potential independent new ventures each of the 199 entrepreneurial ventures had undertaken an initial public offering ipo within the first 6 years of the venture s founding date and were free of corporate sponsorship or prior corporate parentage specifically this research examined the influence of 1 stage of the life cycle 2 industry concentration 3 entry barriers and 4 product differentiation on eight alternative measures of new venture performance the eight measures of new venture performance examined in this research consisted of 1 change in sales 2 sales level 3 net profit 4 earnings before interest and taxes 5 return on sales 6 return on assets 7 return on invested capital and 8 return on equity most prior research examining the influence of industry structure on new venture performance has 1 utilized only one or two measures of new venture performance as indicators of the venture s overall effectiveness and efficiency 2 often failed to provide theoretical justification for the measure s of new venture performance or industry structure examined and 3 utilized data derived from questionnaires and or the pims data base of corporate sponsored new ventures in addition prior industry structure studies examining independent new ventures have often utilized relatively small sample sizes this study sought to advance the progress in the field of entrepreneurship with regard to understanding the influence of the structure of new ventures entered industries on new venture performance by 1 examining eight alternative measures of new venture performance 2 providing theoretical justification for the measures of new venture performance and industry structure examined and 3 utilizing the largest nonquestionnaire data base of independent new ventures developed to date this research found that the stage of the life cycle of the venture s entered industry was the most important determinant of new venture performance among the four industry structural elements examined stage of the life cycle had a statistically significant relationship at a 0 05 level with the majority of the new venture performance measures examined in this research in addition ventures entering industries in the introductory stage of the life cycle achieved the highest levels of venture performance particularly when compared with those ventures that entered industries in the mature stage of the life cycle however this study did not find a statistically significant relationship between stage of the life cycle and change in sales this suggests that there is a trade off between profitability and sales growth and that new ventures that undertake an ipo have a stronger focus on achieving profitable operations rather than sales growth during the initial years after their ipo this may be due to pressures placed on the new ventures to achieve profitability by the external credit market conversely this research found that 1 industry concentration 2 entry barriers and 3 product differentiation did not have statistically significant relationships at a 0 10 level with any of the eight alternative measures of new venture performance examined in this research however this research did find that over 90 of the new ventures entered industries characterized by 1 a low degree of industry concentration and 2 a high degree of product differentiation the relative absence of new venture entry into industries characterized by 1 high degrees of concentration and 2 low degrees of product differentiation provides support for prior theory which suggests that successful entry into such industry environments may be substantially more difficult in sum the results of this research suggest that high potential independent new ventures that undertake an ipo should enter industries in the introductory stage of the life cycle in addition the results of this research suggest that industries characterized by 1 relatively low degrees of industry concentration and 2 highly heterogenous products may be necessary but not sufficient conditions for successful entry by high potential independent new ventures seeking to raise equity capital through an ipo

intangible assets entry strategies and venture success in industrial markets abstract this study assesses the impact of intangible assets on the venture success of firms as they enter into industrial markets that are new to them a new market is one that is geographically new for the firm or is a product market where this firm did not originally compete the analysis is based on the profit impact of market strategy database which contains information on 91 new ventures into industrial markets five hypothesis were tested in this study 1 h1 high levels of intangible assets will be positively associated with performance of firms entering new markets 2 h2 high levels of intangible assets increase the likelihood of success regardless of the timing of entry 3 h3 in explaining venture performance there will be a positive interaction effect between promptness of entry and level of intangible assets pioneer entrants will benefit substantively more from high levels of intangible assets then will later entrants 4 h4 high levels of intangible assets enhance success irrespective of aggressiveness of entry 5 h5 in explaining performance there will be a positive interaction between level of intangible assets and aggressiveness of entry firms with high levels of intangible assets will gain substantively more from aggressive pricing promotion and high quality than firms with low levels of intangible assets one specific intangible asset corporate image is empirically analyzed and the results support our hypotheses a strong corporate image enables the firm to achieve greater success when they enter into new ventures and the interaction of image with aggressive promotional pricing and quality strategies is significant in explaining this success implications for practioners are high image firms reap enormous benefits from increased promotional efforts high quality and aggressive entry low image firms are severely penalized when they aggressively enter a market and may he better off entering the market slowly and at low prices

optimum advertising policy over time for subscriber service innovations in the presence of service cost learning and customers disadoption abstract on the theoretical side this paper characterizes qualitatively optimal advertising policy for new subscriber services a monopolistic market is analyzed first for which customers disadoption discounting of future profits streams and a service cost learning curve are allowed after characterizing the optimal policy for a general diffusion model the results pertaining to a specific diffusion model for which advertising affects the coefficient of innovation that incorporates the disadoption rate are reported the results of the theoretical research show that the advertising policy of the service firm in the presence of customers disadoption could be very different from the same when disadoption is ignored on the empirical side four alternative diffusion models are estimated and their predictive powers using a one step ahead forecasting procedure compared the diffusion data analyzed are related to the canadian cable tv industry empirical research findings suggest that the specific diffusion model considered above is not only of theoretical appeal but also of major empirical relevance the analytical findings of the study are documented in six theoretical propositions for which proofs are provided in a separate appendix the results of a related numerical experiment together with the analytical findings pertaining to the competitive role of advertising are included managerial implications of the study together with directions for future research are also discussed

the anatomy of a corporate venturing program factors influencing success the author proposes a classification framework for factors that affect corporate venture success then a database of 37 new venture investments by exxon including 18 venture capital investments is analyzed for insight into the relative affect of these factors on venture technical and financial success this article presents a statistical analysis of those factors which were quantified as a group the venture capital investments were financially far more successful for exxon than the internally initiated ventures this striking difference stimulated the retrospective analysis reported here the author was in a position to observe the program over its entire life span and had first hand knowledge of each venture s technology markets and personnel because of the mix of venture capital and internal investments the author was also in a position to compare the two modes of investment factors affecting venture success are broadly classified as extrinsic and intrinsic extrinsic or environmental factors are those determined by the form of investment sponsorship e g corporate or venture capital and the characteristics of the investment sponsor extrinsic factors are segregated into two categories structural and procedural these factors are defined as the degree of difference between the corporate and venture environment in each category the four structural factors technology market organization and people are summed up as the overall degree of structural congruence the author postulates that the degree of congruence is directly related to venture success within the corporation to take the corporation into new markets some incongruence is required too much incongruence probably pushes the risk of failure too high the corporation s procedures for management of this incongruence will determine the degree to which it can successfully diversify its business the four procedural factors control selection of venture managers incentive compensation and financing are dealt with as differences between the corporate environment and an independent venture environment major differences in procedural factors usually exist between corporate and venture capital sponsored ventures they probably explain to some extent the relative greater financial success of the exxon venture capital investments as a group however the statistical analysis results indicate that the identified intrinsic factors are more important in explaining relative venture success intrinsic factors are those inherent to the venture itself and are subdivided into two categories product related market and technical risk levels and managerial relative experience levels each of the 37 exxon ventures was rated for success and for the intrinsic factors using a simple ordinal range of 3 to 6 values the product related risk factors showed a significant inverse correlation with financial success the level of venture managers prior experience in the venture s target market area and their level of prior general managerial experience showed an even greater correlation with financial success the sample correlation coefficient between the financial success rating sf and the sum of the ratings for prior marketing and managerial experience xs xm was 0 809 with a standard error of only 0 105 selection of the influential extrinsic and intrinsic factors is largely within the control of corporate management an approach to selection of these factors similar to that used by private venture capital fund managers should greatly improve the overall success of internal corporate ventures

technological innovation in canada a comparison of independent entrepreneurs and corporate innovators abstract this paper compares a sample of 124 independent high technology entrepreneurs with 112 corporate entrepreneurs intrapreneurs involved in developing and introducing high tech innovations across canada the study investigates the general management and technical problems faced by these entrepreneurs and contrasts their approach to such issues as market research financing and production the approaches used by the two groups in analyzing their markets and in planning and financing of innovations are compared and contrasted in general the independent entrepreneurs were technically trained usually possessing engineering training but no general management training or experience neither themselves nor members of their management team corporate entrepreneurs were as likely to come from management backgrounds as technical or else supported their lack of general management skills by adding people to their team with skills in marketing finance and manufacturing their problems were more often defending their ideas to management within the corporation obtaining funding and other resources within the firm and finding a corporate mentor to assist them in such areas as fighting political battles providing rewards and incentives for team members and creating the proper overall environment or culture for innovation within the corporation the lack of general management training and experience by the independent entrepreneurs led them to rate various marketing problems as the most serious difficulties in rating the obstacles to launching their innovations the innovations of the independent entrepreneurs were all new products while some of the corporate innovations were new systems or processes often installed within the corporation so the markets for these innovations were also within the corporation and required less of a marketing effort corporations were also much better prepared to handle problems in the marketing planning and operational areas but they had more problems of an interpersonal nature such as the unwillingness to consider alternative approaches the most significant difference in the obstacles encountered was that independent entrepreneurs listed their five most important problems as marketing difficulties in launching their new products corporate entrepreneurs also rated imperfect market analysis as their most important problem but it was closely followed by the lack of entrepreneurial talent within the company these obstacles lead to the primary recommendation of cooperative agreements of partnerships between large and small firms to solve some of these difficulties corporate responses indicated significant difficulty in gaining support within the corporation while independent entrepreneurs did not have to justify their efforts to a corporate hierarchy

a stage contingent model of design and growth for technology based new ventures abstract stage of growth developmental models have traditionally been used to enhance our understanding of the organizational creation and growth process until recently most of this literature has been primarily conceptual and descriptive this paper presents a stage of growth model theorized to hold for technology based new ventures the model consists of four stages conception and development commercialization growth and stability and views each stage of growth as a reflection of the dominant problems faced over the course of growth by the venture the model predicts that the organization of a venture will be a function ofthe dominant problems that define a stage of growth more specifically it is argued that a technology based venture s rate of growth depends in part on the consistency or fit between its stage of growth and certain structural features of its organization including decision making centralization and formalization and functional specialization in the areas of marketing and sales manufacturing and engineering technology data were collected from 105 technology based ventures in the electronics computer and peripherals industries to test the model the results were generally consistent with the theory and showed that centralization of decision making decreased as the firms moved to higher stages while formalization of decision making increased in higher stages specialization of roles in the functional areas of manufacturing and marketing also increased by stage however specialization in the engineering and technology functions remained high across all stages the contingency hypothesis was also supported indicating that technology based ventures growth is partially attributable to the fit between a venture s stage of growth and aspects of its structure these findings indicate that different patterns of decision making and functional specialization are required at each stage if growth is to be achieved as such this research validates a long standing but untested belief in the venture management field that performance of new ventures depends upon

optimal pricing and advertising in a durable good duopoly abstract this paper analyzes dynamic advertising and pricing policies in a durable good duopoly the proposed infinite horizon model while general enough to capture dynamic price and advertising interactions in a competitive setting also permits closed form solutions we use differential game theory to analyze two different demand specifications linear demand and isoelastic demand for symmetric and asymmetric competitors we find that the optimal price is constant and does not vary with cumulative sales while the optimal advertising is decreasing with cumulative sales comparative statics for the results are presented

vertical cooperative advertising and pricing decisions in a manufacturer retailer supply chain a game theoretic approach abstract manufacturers can increase the advertising expenditures of their retailers by bearing a fraction of the occurring costs within the framework of a vertical cooperative advertising program we expand the existing research which deals with advertising and pricing decisions in a manufacturer retailer supply chain contemporaneously by means of game theory four different relationships between the channel members are considered firstly three non cooperative games with either symmetrical distribution of power or asymmetrical distribution with one player being the leader in each case and one cooperative game where both players tend to maximize the total profit the latter is complemented by a bargaining model which proposes a fair split of profit on the basis of the players risk attitude and bargaining power our main findings are as follows a in contrast to previous analyses we do not limit the ratio between manufacturer s and retailer s margin which provides more general insights into the effects of the underlying distribution of power within the channel b the highest total profit is gained when both players cooperate this behavior puts also the customers in a better position as it produces the lowest retail price as well as the highest advertising expenditures compared to the other configurations

purchasing power parity in less developed and transition economies a review paper abstract the concept of purchasing power parity ppp has been the subject of numerous studies many of which have been unable to prove conclusively this core principle of international finance although industrialized countries have received most of the attention studies that focus on less developed and transition economies have also attained mixed results this study surveys trends in this branch of the literature highlighting the econometric advances that have sought to solve this puzzle while pointing out that more needs to be done to address the reasons that might cause ppp not to hold

stochastic dynamic pricing and advertising in isoelastic oligopoly models abstract in this paper we analyze stochastic dynamic pricing and advertising differential games in special oligopoly markets with constant price and advertising elasticity we consider the sale of perishable as well as durable goods and include adoption effects in the demand based on a unique stochastic feedback nash equilibrium we derive closed form solution formulas of the value functions and the optimal feedback policies of all competing firms efficient simulation techniques are used to evaluate optimally controlled sales processes over time this way the evolution of optimal controls as well as the firms profit distributions are analyzed moreover we are able to compare feedback solutions of the stochastic model with its deterministic counterpart we show that the market power of the competing firms is exactly the same as in the deterministic version of the model further we discover two fundamental effects that determine the relation between both models first the volatility in demand results in a decline of expected profits compared to the deterministic model second we find that saturation effects in demand have an opposite character we show that the second effect can be strong enough to either exactly balance or even overcompensate the first one as a result we are able to identify cases in which feedback solutions of the deterministic model provide useful approximations of solutions of the stochastic model

dynamics of competing with quality and advertising based goodwill goodwill formation is a complex process and many factors influence the formation of goodwill of a firm the implications of advertising enabled goodwill formation are reported in several articles in the research literature in this paper we extend this stream of research by including quality in the goodwill formation process we adopt a dynamic model of competition utilizing a differential game approach and derive expressions for open loop markovian nash equilibrium investments in advertising and quality the insights gained from the analysis of our model and from the equilibrium solutions are presented in the form of research propositions

pricing strategies in a dynamic duopoly a differential game model we formulate a differential game model for dynamic pricing in a duopolistic market firms demand functions are derived from utility maximizing behavior of consumers with the demand for a brand given by the logit model preferences for brands are assumed to evolve over time in the market in a manner akin to learning models postulated in the marketing literature we derive the differential equations governing the equilibrium open loop price paths over time and show that in steady state the brand with the higher preference level charges the higher price the formulation is extended to include the effects of consumer heterogeneity and equilibrium steady state prices are compared with those obtained when heterogeneity is ignored a comparison of steady state dynamic prices with myopic prices is provided an empirical example is discussed to show how steady state model predictions may be obtained from actual longitudinal purchase data

mean reversion of real exchange rates in high inflation countries we test for mean reversion in real exchange rates using data from five countries four of which have experienced episodes of high inflation using monthly data for argentina brazil chile colombia and israel we find that a stochastic unit root model is typically appropriate brazil is the exception kalman filter estimates of the stochastic unit roots show sharp deviations from unity associated with high inflation episodes this suggests that stochastic unit root models are a more appropriate way to model mean reversion in real exchange rates for high inflation countries than models with fixed rates of mean reversion

a dynamic perspective of internal fit in corporate venturing abstract managers of corporate parents and their ventures have long been faced with the question of how closely to tie the parent and venture a close connection may enable a venture to capitalize on the competencies and resources of the parent however venture autonomy could prevent corporate inertia and bureaucracy from constraining venture growth the lack of consensus on this issue leads us to the first of two complementary research questions that we address in this paper what is the effect of internal strategic fit between a corporate parent and its venture on venture performance we suggest that a tight fit is positively associated with venture performance because of the venture s access to its parent s resources managers and researchers alike have often observed that growing enterprises are dynamic entities in the case of corporate ventures this implies that the relationship between parent and venture evolves over time our second research question directly addresses this issue by asking does the relationship between a corporate parent and its venture s evolve over time and if so how we identify two dimensions of the fit between corporate parents and their ventures relational and economic a relational fit reflects organizational culture and structure while an economic fit is a function of the needs of the venture and the resources of the parent we develop a series of hypotheses and test them with survey data from 97 canadian corporate ventures for the purposes of this study we define success as the ability of a firm to meet internal milestones on schedule we find that the degree of fit between a corporate parent and its venture does affect the success of a venture and that success is associated with high levels of awareness commitment and connection further the relational dimension of the parent venture interface appears to have a greater association with venture success than does the economic dimension our data support the idea that the parent venture relationship is dynamic in nature as ventures in our sample generally lessened their economic connections with their parents as they matured or vice versa we did find however that the relational bonds remained more or less intact the exceptions to these general trends were an increasing emphasis on financial targets along with decreasing ceo involvement as ventures matured both of these findings make intuitive sense greater financial independence is accompanied by greater financial accountability and as a venture gains in both independence and accountability there is less need for the ceo to provide air cover these two issues aside the basic model of enduring relational ties and diminishing economic ties was supported as well the increasing accountability is consistent with our expectation that a close connection is preferable to high venture autonomy

competitive advertising strategies and market size dynamics a research note on theory and evidence this paper analyzes competing firms advertising strategies in markets characterized by dynamic market sizes for new product innovations a large literature has been developed on the basis of the celebrated bass diffusion process which captures what we call market size dynamics however in spite of the significant literature incorporating competitiveness into the bass model few if any analytical results have been obtained especially those with normative implications on the other hand important theoretical and empirical insights have recently been obtained using the famous lanchester warfare model of competition in which market share dynamics are governed by advertising activities for mature products whose market sizes are typically fixed or stable our paper seeks to address the issue of optimal advertising strategies incorporating both market share dynamics and market size dynamics in doing so we seek to take advantage of the theoretical and normative insights currently available in the lanchester formulation for mature products to obtain normative analytical results on competitive advertising strategies for new product innovations whose markets evolve around the bass process we first obtain analytical solutions to the problem at hand and offer theoretical implications for competitive advertising on the bass diffusion model the models parameters are then estimated using a set of data on sales and advertising expenditures of polaroid corp and eastman kodak co in instant photography during the 19761985 period optimal trajectories for the firms advertising spending are then calculated and other marketing and managerial implications of optimal advertising strategies are explored

the financing threshold effect on success and failure of biomedical and pharmaceutical start ups the theories of technological innovation are examined in the context of the formation and growth of biomedical and pharmaceutical firms analyses are based on detailed data gathered from 26 firms founded between 1968 and 1975 in massachusetts supplemented by a three member expert panel evaluation of the risk associated with use of each firm s products a positive relationship was established between the level of technological sophistication of the firm and the risk associated with use of its products consequently technological advancement of the firm has not necessarily resulted in high economic performance in part because of the high demands put upon the firm s resources and time by the u s food and drug administration approval process the study indicates that the initial financial inputs have a threshold effect on subsequent economic performance of biomedical and pharmaceutical new firms in the sample studied unless these inputs reached the 850 000 to 1 000 000 mark in 1970 1975 dollars technological innovation was negatively mediated by the risk associated with the use of firm s products and by the fda quality control procedures consequently attempts at technological innovativeness are unfortunately detrimental to the economic performance of underfinanced new firms in the biomedical and pharmaceutical industry

start up ventures towards the prediction of initial success abstract there are numerous studies on new product activities that try to measure the relative impact of different factors on success or failure the research on new ventures is less comprehensive and often only a few items are considered this article reports on the early results from a research program that is combining the research on both new products and new ventures to come up with a more comprehensive evaluation of relative success factors the literature was reviewed to determine the most significant factors found in prior work a 68 item questionnaire was developed and used with the chief executives of 24 new technical ventures all associated with the rpi incubator or technology park ten of the 17 factors investigated yielded reliable measurements which were then subjected to siepwise regression analysis to determine the relative impact of each factor on the two success measurements used initial quantified success and initial subjective success it should be recognized that initial success does not necessarily predict ultimate success an area to be investigated in continuing studies the two success measurements were not correlated and the correlations with the independent variables were therefore different initial quantified success showed a strong negative correlation with market attractiveness companies entering smaller or more slowly growing markets were doing better than those in the larger faster growing markets initial quantified success was positively correlated with the level of entrepreneurial characteristics exhibited by the leader s these were the only two variables exhibiting significant relationships with quantified success initial subjective success was negatively correlated with market dynamism rather than market attractiveness negative correlation was also measured with both r d intensity and the organic nature of the firm this latter finding is contrary to much of the new product literature which emphasizes the need for individual independence and initiative such may be the case with new products or ventures within large organizations but in small independent ventures the entrepreneur should provide strong control and guidance a positive correlation was observed with the entrepreneurial characteristics and also with the degree of match between the firm s experience and the new business requirements no significant correlation was observed with 1 product or service uniqueness 2 gross margin or 3 strategic aggressiveness the lack of correlation with these variables is surprising but it may be due to the small size of the sample the research confirmed two items that are understood by most scholars and experienced practitioners the importance of the entrepreneur and the importance of pursuing new ventures that match the technical and market experience of the team the less obvious results are those that suggest that success is favored by strong review and control by the entrepreneur rather than the development of employee initiative and independence also the initial success appears to be coming more readily to firms in more slowly growing or less dynamic markets it will take an expanded sample and a longer time horizon to determine if these initial trends continue to ultimate success

optimal order quantity and selling price over a product life cycle with deterioration rate linked to expiration date it is evident that the lower the price the higher the demand therefore price is an important factor in a consumer s purchasing decision additionally for today s health conscious consumers product freshness is another important factor in purchasing decisions since product freshness declines over time today s health conscious consumers prefer a perishable product with a longer sell by date to a shorter one moreover a product s demand rate moving through its life cycle can be approximately represented by a trapezoid type pattern which includes constant demand increasing demand and decreasing demand as special cases in existing literature several researchers have developed inventory models for trapezoidal demand however they failed to consider pricing strategy product freshness linked to expiration date and purchasing cost in this study we enhance previous models by 1 taking pricing into consideration 2 exploring deterioration rate linked to expiration date and 3 adding an appropriate non constant purchasing cost we then derive theoretical results and run numerical examples to obtain managerial insights for instance the total profit without purchasing cost is significantly lower than that with purchasing cost included also if the cost of lost sales is improperly low then the total profit may become negative due to a large amount of lost sales

market attractiveness resource based capabilities venture strategies and venture performance abstract this research seeks to identify variables that should be related to venture performance it is hypothesized that both market attractiveness and resource based capabilities are directly related to new venture performance in addition specific resource based capabilities are hypothesized to be directly related to the competitive strategies chosen by a firm finally the fit between strategies and resource based capabilities is hypothesized to be related to venture performance the sample consisted of all manufacturing businesses sic codes 20 39 started or reorganized in the corporate form between 1980 and 1991 in nine counties in northwestern pennsylvania as identified by a major marketing research service of the 800 companies surveyed completed questionnaires were returned for 155 representing a 19 response rate the 155 responding companies had a median age of 5 years with a median of 15 employees the major products of companies in the sample included flour lumber household and office furniture plastic containers tools and dies ready mixed concrete pipe fittings measuring devices paint and varnish machine tools electroplate carbon and graphite composite products plastic laminated products circuit boards electronic components and parts for internal combustion engines in general the results confirm the validity of the measures of environmental and organizational characteristics as we have adapted them for new ventures as hypothesized perceived market attractiveness and the overall abundance of resource based capabilities were significantly related to venture performance also in two of three cases the evidence suggests that specific resource based capabilities are related to the firm s stated competitive strategies finally although the relationship between fit and performance is not supported in all cases the performance of the emerging manufacturing ventures included in this sample appears to be enhanced when resource based capabilities are supportive of a cost leadership strategy and when firms seeking to differentiate based on product and service quality have the resource based capabilities to support that strategy the results of this emerging research stream will make an important contribution to our understanding of the factors that impact firm performance for scholars the results provide additional information needed to develop comprehensive new venture performance models a clear understanding of the factors that have a strong influence on venture performance will enable practitioners to better identify viable business opportunities and academicians to provide potential business founders with tools to help them recognize opportunity in addition the identification of appropriate levels of abstraction will provide building blocks for future research that seeks to integrate environmental and firm level constructs

dynamics of pricing in the video game console market skimming or penetration abstract nintendo lost its dominant position in the video game industry during the console war between its nintendo 64 and sony s playstation however nintendo could have made several different strategic decisions to change the outcome this article develops a structural model and investigates these alternative strategies through policy simulations in particular the author provides a framework to study firms optimal pricing strategies under network effects consumer heterogeneity and oligopolistic competition consumer heterogeneity provides an incentive for a durable goods manufacturer to price skim while network effects lead to an opposite motive for penetration pricing the proposed framework incorporates these two competing motives under oligopolistic competition the author estimates a demand system that allows for indirect network effects and consumer heterogeneity and then numerically solves for the markov perfect equilibrium in firms dynamic pricing game policy simulations indicate that ni

coordinating advertising and pricing in a manufacturer retailer channel abstract cooperative advertising is a practice that a manufacturer pays retailers a portion of the local advertising cost in order to induce sales cooperative advertising plays a significant role in marketing programs of channel members nevertheless most studies to date on cooperative advertising have assumed that the market demand is only influenced by advertising expenditures but not by retail price this paper addresses channel coordination by seeking optimal cooperative advertising strategies and equilibrium pricing in a two member distribution channel we establish and compare two models a non cooperative leader follower game and a cooperative game we develop propositions and insights from the comparison of these models the cooperative model achieves better coordination by generating higher channel wide profits than the non cooperative model with these features a the retailer price is lower to consumers and b the advertising efforts are higher for all channel members we identify the feasible solutions to a bargaining problem where the channel members can determine how to divide the extra profits

analytical models of competition with implications for marketing issues findings and outlook the authors review a representative cross section of analytical models of competition using a framework for competitive analysis developed from a marketing perspective models are classified by the

prediction of failure of a newly founded firm abstract the rate of mortality among newly founded firms is very high failure statistics universally show that over 50 of newly founded firms will fail during their first five years the economic financial and social losses resulting from these failures are significant thus it is valuable to try to develop methods to predict and to avoid such failures however there are only very few studies dealing with failure prediction methods for newly founded firms the aim of this study was to develop such methods that would also have practical value failure was defined as cash insolvency the aim was to develop a failure prediction model based on financial statement data from newly founded firms the ratios based on these data are hard measures and easy to calculate also for a person forced to only use publicly available information a prediction model based on these ratios could then be a practical method for financial analysts and other interest groups in evaluating the failure probability of a new firm this model does not require information about management products or markets because it rather deals with the symptoms of failure than the causes the study is based on a supposition that failure process in a newly founded firm is characterized by a too high initial indebtedness and by too low revenue financing as compared with the budget this supposition was supported by the empirical results based on the comparison of the financial ratios in first four years between 20 failed and 20 nonfailed small newly founded entrepreneurial industrial firms these results may give an explanation as to why some newly founded firms will fail and some will survive this explanation is of course based on the development of financial variables in the very first years the results showed that it is possible to some degree to predict the failure of a newly founded firm already in the first year after foundation the prediction accuracy will increase when the data of failure is approached the best univariate predictors proved to be stockholders capital to total capital ratio indebtedness cash flow to net sales ratio revenue financing and cash flow to total debt ratio sufficiency of revenue financing to pay financial obligations the prediction accuracy can be increased by adjusting the critical value of the ratio stepwisely to the year of operation thus the optimal critical value will change year by year after foundation the prediction accuracy can slightly be improved by a multivariate analysis this kind of multivariate model also included the logarithmic size net sales of the firm as a variable so that the probability to fail increased when the size increased the results also showed that the same multivariate model estimated for older small firms can be used as a failure prediction model for newly founded firms however this requires that quite different critical values are selected for both types of firms to summarize the results show that the failure of a newly founded firm is to some degree predictable by univariate or multivariate analyses the failure risk is increased with high indebtedness insufficient revenue financing and large size in the first years hence the risk to fail can be reduced by using less debt as initial financing and by paying special attention to the generation of a sufficient amount of revenues in initial stages furthermore it may be less risky to start business operations with a smaller rather than larger initial size

the dynamic pricing of next generation consumer durables learning curve effects aspects of consumer demand models e g reservation price distributions intertemporal utility maximizing behavior and competitive activity are reasons which have been offered to explain why prices of new durables decline over time this paper presents an alternative rationale based on the buying behavior for products with overlapping replacement cycles i e next generation products a model for consumer sales of a new durable is developed by incorporating the replacement behavior of a previous generation product pricing strategies for two product generations are investigated analytically and with numerical methods results indicate that durable replacement behavior leads to a wider set of optimal pricing strategies than previously obtained several empirical illustrations of industry pricing practices for successive product generations are also shown to be consistent with the theoretical results finally various areas for future research are outlined

a diffusion model incorporating product benefits price income and information we start by assuming that a major benefit of many new durable products such as dishwashers and microwave ovens is time savings others such as vcrs also enhance the value of our leisure time using a household production framework we demonstrate that a utility maximizing individual will have a reservation price for the product which is a function of the product benefits and his wage rate by assuming that the wage rate has an extreme value distribution across the population we are able to derive for the aggregate process an income price dependent logistic adoption equation we then allow for the possibility that certain eligible consumers may delay their purchase of the product because they are unaware that it exists are suspicious of its quality or expect its price to fall unawareness uncertainty and hope for further price declines are assumed to decrease with the increase in the number of previous adopters the resulting diffusion model has the property that the product life cycle phenomenon can be explained jointly or separately by the income price process and the awareness uncertainty expectations process using data on household income on durable penetration within different income classes and on first purchase sales the aggregate diffusion model and its premises are tested and supported it is found that both the income price and awareness uncertainty expectations processes are at work however the dependence of the awareness uncertainty expectations delay process on the number of previous adopters e g word of mouth type effect exists only in certain product categories and is usually relatively weak it is demonstrated that if the word of mouth type effects are weak a price skimming strategy is optimal for a monopolist and also is likely to be implemented by oligopolists the sales forecasting implications of the model also are pursued

long run purchasing power parity in the 1920s abstract this paper presents an empirical analysis of long run purchasing power parity ppp during the 1920s float using recently developed methodology on the cointegration of economic time series our results are generally supportive of ppp as a long run equilibrium condition on which exchange rates tended to converge over the period for dollar sterling however there is some evidence of a non stationary drift away from fundamentals during the last year or so before britain s return to the gold standard perhaps due to speculation our results also appear to reconcile some apparently conflicting evidence in the literature

emerging high tech firms how durable are their comparative start up advantages abstract successful high tech entrepreneurial firms have been shown to have several common founder characteristics and start up conditions this paper presents a study of the duration of the effect of these characteristics and conditions on a firm s early growth do they have a permanent effect or does the early comparative advantage that they confer to the firm fade away after a few years successful firms being better able to adapt to changing conditions than the others the study is based on the longitudinal analysis of the first 8 years of operations of 73 high tech firms located in various parts of canada founded between 1965 and 1980 by one or several entrepreneurs in microelectronics communications and related fields the sample includes only survivors and manufacturers all the firms being still active and doing some manufacturing at data collection time in terms of firm size start up capital and sources of financing this sample is comparable to other samples of high tech start ups described in the literature and can therefore be assumed to be representative of the industry the importance of the government sector in canada resulted in a very high government orientation of the firms at start up an average 32 of first year sales being to the public sector similar market and firm behaviors may develop in other industrial economies some having very important government sectors e g france italy or high tech markets indirectly driven by governments through major defense and space contractors in the united states the analysis confirms the positive short and medium term impact of such start up characteristics as initial size start up capital past experience in marketing finance and government contracting founder s age market structure and similarity with the market served by a previous employer however except for initial size sales initial government orientation percentage sales to the public sector year i and previous experience in government contracting which tend to be excellent predictors of medium to long term success measured in terms of sales level other start up characteristics show only short term direct effects 3 years for past experience in marketing and finance 1 to 2 years for market structure and similarity of the market served with that of a previous employer they are however indirectly related to success through their effect on initial size and government orientation past experience in government contracting is strongly linked with initial government orientation whereas initial size and initial government orientation are independent of each other initial size and initial government orientation are therefore two independent start up traits that show the longest global direct effect on sales level 8 years the time horizon of this study when regrouping firms by initial size and government orientation other long term at least 8 years effects appear for all the firms size of the previous employer and similarity of technology with that of a previous employer for smaller start ups similarity of their market with that of a previous employer for government oriented firms amount of start up capital past government employment past experience in rd and for non government oriented firms past government employment and past r d experience from a practical point of view these results illustrate the importance of start up conditions behaviors and strategies can evolve as a firm matures but some initial characteristics seem to be clearly associated with sustained comparative advantage either because they lead to larger initial size or good government contracts or because they impact on the general orientation and strategy of the firm considering these start up conditions is therefore useful to the entrepreneur when planning a start up to the venture capitalist when analyzing a start up and to the public sector planner when developing support policies

planning marketing mix strategies in the presence of interaction effects companies spend millions of dollars on advertising to boost a brand s image and simultaneously spend millions of dollars on promotion that many believe calls attention to price and erodes brand equity we believe this paradoxical situation exists because both advertising and promotion are necessary to compete effectively in dynamic markets consequently brand managers need to account for interactions between marketing activities and interactions among competing brands by recognizing interaction effects between activities managers can consider interactivity trade offs in planning the marketing mix strategies on the other hand by recognizing interactions with competitors managers can incorporate strategic foresight in their planning which requires them to look forward and reason backward in making optimal decisions looking forward means that each brand manager anticipates how other competing brands are likely to make future decisions and then by reasoning backward deduces one s own optimal decisions in response to the best decisions to be made by all other brands the joint consideration of interaction effects and strategic foresight in planning marketing mix strategies is a challenging and unsolved marketing problem which motivates this paper this paper investigates the problem of planning marketing mix in dynamic competitive markets we extend the lanchester model by incorporating interaction effects constructing the marketing mix algorithm that yields marketing mix plans with strategic foresight and developing the continuous discrete estimation method to calibrate dynamic models of oligopoly using market data both the marketing mix algorithm and the estimation method are general so they can be applied to any other alternative model specifications for dynamic oligopoly markets thus this dual methodology augments the decision making toolkit of managers empowering them to tackle realistic marketing problems in dynamic oligopoly markets we illustrate the application of this dual methodology by studying the dynamic lanchester competition across five brands in the detergents market where each brand uses advertising and promotion to influence its own market share and the shares of competing brands empirically we find that advertising and promotion not only affect the brand shares own and competitors but also exert interaction effects i e each activity amplifies or attenuates the effectiveness of the other activity normatively we find that large brands underadvertise and overspend on promotion while small brands underadvertise and underpromote finally comparative statics reveal managerial insights into how a specific brand should respond optimally to the changes in a competing brand s situation more generally we find evidence that competitive responsiveness is asymmetric

optimal advertising policies for diffusion models of new product innovation in monopolistic situations this paper deals with the determination of optimal advertising strategies for new product diffusion models we consider the introduction of a new consumer durable in a monopolistic market and the evolution of sales is modelled by a flexible diffusion model repeat sales and possible entry of rivals are disregarded but we allow for discounting of future revenue streams and cost learning curve using standard methods of optimal control theory we characterize qualitatively the structure of an optimal advertising strategy for different versions of the diffusion model

the incidence of visible underemployment evidence for trinidad and tobago this article presents an empirical analysis of the incidence of visible underemployment in trinidad and tobago visible underemployment consists of workers who work less than the normal duration of working hours but are willing and available to work more we find that compared to other groups of the labour force the visibly underemployed tend to be less educated and are more likely to work in the private sector we also find that their revealed behaviour is consistent with their desire for more hours only about 50 per cent of the visibly underemployed are able to find full time employment within three months and little except firm size helps predict who will

the impact of competitive entry in a developing market upon dynamic pricing strategies this paper analyzes dynamic pricing strategies for new durable goods in a two period context the first period is characterized as a monopoly market structure for a new product having dynamic demand the second period begins when a new firm enters the market and thereby changes the market structure to a duopolistic one we begin by analyzing the pricing strategies of three types of monopolists nonmyopic myopic and surprised a nonmyopic monopolist is a first entrant who perfectly predicts the competitive entry a myopic monopolist totally discounts the duopolistic period and a surprised monopolist is a first entrant who has the longer time horizon of the nonmyopic monopolist but who does not foresee the competitive entry our results indicate that the nature of these pricing strategies may be quite different it is optimal for the nonmyopic firm to price its product at a higher level than the myopic monopolist additional results indicate under what circumstances the surprised monopolist will p

real exchange rate persistence and country characteristics a global analysis abstract this paper examines the persistence of real exchange rates across 151 countries we employ univariate time series techniques on a country by country basis allowing for deterministic structural breaks and nonlinearities in the adjustment process our findings suggest that bilateral exchange rates display higher rates of persistence than multilateral exchange rates with the latter former exhibiting half lives of less than 1 2 year s assessing country results by stage of economic development we find that industrial countries display higher levels of exchange rate inertia than developing countries we retrieve evidence indicating that higher inflation nominal exchange rate volatility trade openness and proximity to reference country are associated with faster rates of real exchange rate convergence conversely international financial integration is found to only play a role at the country group level with differential effects across cohorts

optimal pricing strategies for new products in dynamic oligopolies this paper deals with the determination of optimal pricing policies for firms in oligopolistic markets the problem is studied as a differential game and optimal pricing policies are established as nash open loop controls cost learning effects are assumed such that unit costs are decreasing with cumulative output discounting of future profits is also taken into consideration initially the problem is addressed in a general framework and we proceed to study some specific cases that are related to models presented in recent literature three basic classes of sales dynamics are analyzed competition with price effects only competition with price as well as adoption effects and competition with adoption effects only in some cases it turns out that results which hold for the monopoly case carry over to the multi firm case in the sense that the qualitative structure of optimal pricing strategies is the same in the monopoly and the oligopoly cases however due to competitive interdependencies differences certainly exist in the levels as well as the rates of change of optimal prices

entrepreneurship and the initial size of firms abstract it is clear that entrepreneurs and their firms can vary widely nevertheless most of the research to date on entrepreneurship has examined central tendencies with relatively little attention devoted to entrepreneurial diversity this study examines one of the most distinguishing characteristics of young firms initial size the focus is whether smaller start ups differ from larger ones in the backgrounds of the entrepreneurs their processes of starting or the subsequent patterns of development in this longitudinal study an initial sample of 1903 young firms was examined to determine differences in characteristics of the entrepreneurs and in their processes of starting one year later data were obtained from 742 of these firms permitting analysis of how initial firm size was related to subsequent difficulties encountered and changes made as well as to performance as expected along almost every dimension these starting larger firms had the backgrounds that would seem to be necessary for the assembly of substantial resources they tended to have more education more management experience and goals that were more managerial in nature they also were more likely to have partners women were associated more often with smaller ventures but for this sample there were no differences in the representation of minorities between the smaller and larger start ups those starting larger ventures tended to rely more upon external investors and to start ventures more closely linked to their previous jobs both groups of entrepreneurs sought information from a number of sources but those founding larger ventures utilized professional advisors more whereas those starting smaller ventures utilized informal sources in the year after the first questionnaire differences between the two groups were less marked than expected both groups of surviving firms reported low levels of serious problems with the smaller ventures somewhat surprisingly reporting serious problems less often there were not many differences in changes made except that smaller ventures were more likely to lose partners and larger ventures were more likely to add branches or locations both groups reported high rates of mean growth in sales the smaller ventures with their small initial bases showed larger percentage increases smaller ventures also showed higher percentage increases in employment and surprisingly a greater increase in the absolute number of employees somewhat more of the smaller ventures had discontinued both groups included many firms that grew substantially and others that scaled back demonstrating the fluidity and experimentation characteristic of young firms for entrepreneurs and their advisors for public policy makers and for researchers any progress in understanding entrepreneurial processes should in the long run enhance venture performance the patterns observed here indicate that firms of different initial size tend to be associated with particular entrepreneurial characteristics processes of formation and subsequent patterns of development this diversity should be recognized in the development of assistance programs and university courses as well as in the interpretation of previous research for public policy makers the growth of these firms both small and large indicates the potential of economic contributions from entrepreneur ship further the growth of the smaller start ups suggests that even those ventures that appear to have few resources and modest potential can in the aggregate contribute substantially to the economy

corporate versus independent new ventures resource strategy and performance differences abstract this study examines differences between independent ventures ivs which are established by individual entrepreneurs and corporate ventures cvs which are controlled by larger companies it focuses on differences between these ventures related to the resources strategies and performance of firms in the computer and communications equipment manufacturing industries thus the findings increase the understanding of the different challenges faced by each venture type and provide insight into how each venture type should be managed the study finds that managers of cvs and ivs emphasized different resources and strategies specifically cvs emphasized the following resources internal capital sources proprietary knowledge and marketing expertise ivs emphasized external capital sources technical expertise and development of brand identification they also differed in their strategies ivs pursued greater strategic breadth more customer service and focused more on specialty products the findings that cvs had less strategic breadth was surprising in that cvs emphasized resources such as internal capital sources which could make pursuing broad strategies more feasible for cvs it is possible that some cvs do not pursue broad strategies because they may be infringing upon someone else s turf within the corporation and thus may be discouraged in spite of finding significant strategy and resource differences the study found that ivs and cvs did not differ in performance and that resources were not directly related to performance based on the concept of equifinality it follows that both venture types can be equally successful even if they follow different roads to success success may be less a function of the different resources ivs and cvs have and more a function of what strategies the firms choose based upon their resources strategy variables did relate to performance a low cost strategy lowered performance regardless of venture type and the influence of an aggressive strategy i e wide strategic breadth on performance depended upon venture origin managers pursuing a low cost strategy may have had lower performance if they became penny wise and pound foolish missing opportunities in their efforts to lower costs this suggests that regardless of venture type managers of new ventures in these industries and perhaps in other volatile industries may need to be opportunistic this study indicates that pursuing broad strategies increased the performance of ivs and decreased the performance of cvs this finding was surprising in that cvs had greater resources which one might think would lead to successful implementation of aggressive strategies in securing enough resources to pursue aggressive strategies from their parents cvs may lose the freedom of action they need to cope with the dynamism of high technology industries this suggests that managers of cvs within the computer and communications equipment manufacturing industries should either not pursue broad strategies or if pursuing broad strategy they should maintain their flexibility in contrast ivs that pursued broad strategies achieved higher performance indicating that perhaps ivs unencumbered by the bureaucracy that characterizes cvs may be able to pursue aggressive strategies while simultaneously maintaining flexibility thus this study offers iv and cv managers several valuable insights first it argues that managers of each type of venture may need to pursue different strategies to increase venture performance and make optimal use of their unique resources furthermore it suggests that cv managers encounter difficulties in applying resources to strategies and not in accessing resources whereas political obstacles may occur cv managers may primarily encounter these difficulties when trying to implement strategies rather than when accumulating resources from the parent suggesting a pitfall that managers of cvs and their parents need to avoid although this study has indicated that both venture types can be equally successful it suggests that they may face different obstacles and follow different roads to success

optimal dynamic advertising policy for new products advertising is one of the key marketing tools managers have at their disposal to influence their customers into purchasing a new product the overall objective of new product advertising is to inform and persuade customers drawing up an advertising plan for a new product that is under the influence of diffusion phenomenon is not an easy task hence research in this area is very limited in our research we use an empirically proven diffusion demand function that explicitly incorporates the advertising component our results suggest that optimal advertising is determined by the advertising effectiveness discount rate and the ratio of advertisement to profits depending upon the interplay among these factors the optimal advertising takes decrease increase increase decrease monotonically increasing or monotonically decreasing shape

strategies of high performing new and small firms a reexamination of the niche concept abstract entrepreneurs seeking to position new or small firms in industries populated by well established competitors are frequently advised to seek the protection of a market niche there shielded by market characteristics which render the niche uninteresting to larger rivals small firms are urged to compete at the fringe of the market this article challenges this conventional wisdom citing industry and firm characteristics which under certain conditions create opportunities for successful direct competition by some small or new firms against much larger and established competitors however the authors caution that the conditions which created the opportunity may erode in time rendering the successful challenger vulnerable either to retaliation by the larger firm or challenge from subsequent entrants examples of successful direct confrontation by relatively small competitors are drawn from mature low tech industries a rapidly growing high tech industry and the service sector

optimal trade credit and lot size policies in economic production quantity models with learning curve production costs abstract in reality a seller e g a supplier or a manufacturer frequently offers his her buyers trade credit e g permissible delay in payment trade credit reduces the buyer s holding cost of inventory and hence attracts new buyers who consider it to be a type of price reduction on the other hand granting trade credit also increases the seller s opportunity cost i e the loss of capital opportunity during the credit period and default risk i e the event in which the buyer will be unable to make the required payments on his her debt obligation in addition it is a well known fact of learning by doing that production cost of a new product declines by a factor of from 10 to 50 percent each time the accumulated production volume doubles therefore we propose an economic production quantity model from the seller s prospective to determine his her optimal trade credit period and production lot size simultaneously in which i trade credit increases not only sales but also opportunity cost and default risk and ii production cost declines and obeys a learning curve phenomenon then the necessary and sufficient conditions to obtain the seller s optimal trade credit and order quantity are derived finally we use some numerical examples to illustrate the theoretical results and to provide some managerial insights

long run purchasing power parity during the recent float abstract this paper examines the relevance of long run purchasing power parity ppp which allows for measurement errors during the recent floating exchange rate period previous empirical studies generally fail to find support for long run ppp over this period in this paper in this paper the cointegration property of exchange rates and prices is examined using maximum likelihood procedure and we find significant evidence favorable to long run ppp further tests for symmetry and proportionality indicate that these two conditions are not generally with the data the results support the hypothesis of long run ppp with measurement errors in prices

product life cycle considerations and the nature of strategic activities in entrepreneurial firms abstract this article reports on the nature of strategic activities and concerns reported by the ceos of 77 entrepreneurial manufacturing firms once initial success in their marketplace had been achieved once the entrepreneurial firm achieves initial market success the rate and number of strategic decisions faced by the entrepreneurs rapidly expand a product becomes a product line product lines are added facilities and equipment are expanded personnel are added a more formal and interpersonally complex organization becomes necessary markets and distribution channels expand adding uncertainty to key market related decisions new financial risks arise often as the result of undercapitalized cash flows all of these factors combine to dramatically increase the pressure on the entrepreneur s strategic decision making a major factor underlying the complicity inherent in this scenario is the product market life cycle the entrepreneurs must now organize and make decisions regarding several product lines that span several life cycle stages with different strategic concerns rather than regarding the narrow product range and limited life cycle position that provided their initial success the research reported in this article examined the relative importance of ten strategic activities and concerns reported by the 77 ceos across products at different life cycle stages initial interviews with selected ceos and a review of the strategic management literature identified ten key factors shaping the firm s evolving decision making practices these ten factors were divided into three groups 1 1 operational concerns that necessitate strategic attention 1 changes in product design 2 changes in process design 3 risk of producing a product and 4 emphasis on creativity 2 2 dimensions influencing a firm s strategic management activities 5 demand on the strategic manager s time 6 speed of decision making 7 problems of internal politics and 8 environmental uncertainty 3 3 fundamental assumptions underlying a firm s decision making practices 9 annual profit potential and 10 value of strategic planning there are two main sets of results first four process related factors value of strategic planning demand on ceo s time speed of decision making and annual profit potential were consistently the most important factors affecting performance within eact stage regardless of the life cycle of a particular product line the manner or process by which decisions were made strategic planning ceo s time and speed of decision making and one key assumption or objective annual profit potential were seen as factors more important in affecting performance than were operating concerns that necessitated strategic attention second strategic issues associated with product lines at the development and growth stages of their life cycle are reported to be significantly more important to ceos in entrepreneurial manufacturing firms than are strategic issues associated with mature or declining products lines these results suggest that ceos in entrepreneurial manufacturing firms should re examine their strategies and practices to be sure that sufficient strategic attention is being given to decisions regarding mature product lines in addition these ceo s need to ensure in the face of constant demands for their time and decisions that operating concerns requiring strategic attention get appropriate consideration

myopic solutions to affine dynamic models new sufficient conditions are presented for a dynamic process to have a myopic optimum and for a sequential game to possess a myopic equilibrium point an optimum or an equilibrium point is said to be myopic if it can be specified by solving a static optimization problem or a static nash game the results are applied to an aquaculture harvesting model and a dynamic oligopoly model with advertising decisions

optimal pricing and advertising policies for new product oligopoly models in this paper our previous work on monopoly and oligopoly new product models is extended by the addition of pricing as well as advertising control variables these models contain bass s demand growth model and the vidale wolfe and ozga advertising models as well as the production learning curve model and an exponential demand function the problem of characterizing an optimal pricing and advertising policy over time is an important question in the field of marketing as well as in the areas of business policy and competitive economics these questions are particularly important during the introductory period of a new product when the effects of the learning curve phenomenon and market saturation are most pronounced we consider first the monopoly case with linear advertising cost exponential demand and three different pricing rules the optimal variable pricing the instantaneous marginal pricing and the optimal constant pricing rules several theoretical results are established for these rules including the facts that the instantaneous marginal pricing rule is a myopic version of the optimal pricing rule and the optimal constant pricing rule is a weighted average over time of the instantaneous marginal pricing rule another surprising result is that after the market is at least half saturated a pulse of advertising must be preceded by a significant drop in price numerical solutions of a number of examples are discussed oligopolistic models are analyzed as nonzero sum differential games in the rest of the paper the state and adjoint equations are easy to write down but impossible to solve in closed form hence we describe how to reformulate these models as discrete differential games and give a numerical algorithm for finding open loop nash solutions the latter was used to solve three triopoly models in each case it was found that optimal prices and advertising rates start high and steadily decline

dynamic advertising strategies of competing durable good producers this work develops a diffusion model which incorporates word of mouth and advertising effects for two firms introducing competing brands of a new durable product the competition between the two firms is formulated as a two player nonzero sum markovian game the firms are assumed to behave noncooperatively in choosing their advertising strategies and the solution concept is a nash noncooperative equilibrium optimal advertising policies for this stochastic closed loop control problem are obtained via dynamic programming our results indicate that both firms will start with high advertising outlays which will get reduced as the number of adopters increases this is similar to the result obtained previously for a monopolist further we find that there is a significant value in being the first brand to the market and the greater the intensity of word of mouth effects the greater the value in being first the first entrant advantage is due to the goodwill generated by its stock of previous adopters this first entrant advantage can only be overcome if the second entrant enters with a superior brand which is more enthusiastically endorsed by its adopters

a simulation analysis of alternative pricing strategies for dynamic environments the implicit assumption of the classical economic model of price determination is that the firm maximizes short run profits however one of the key implications of strategy research of the past decade is that short run profit maximization is not an appropriate criterion for many market situations instead market share has been proposed as the key to long term profitability see e g buzzell gale and sultan 1974 abell and hammond 1979 this proposition has had a strong impact on both marketing practice and research hopkins 1981 reports that 88 of industrial firms surveyed spell out market share goals in detail the emphasis on market share in practice has been reflected in the theoretical side also where numerous market share forecasting and maximizing models have been published long term profitability has also become a research interest in its own right more than a dozen papers have appeared in major journals since 1975 the impetus to this activity has been the recognition of the existence of intertemporal effects in the environment for example on the demand side a consumer s purchasing in a given time period may preclude purchasing in the future because of the durability of the good or personal inventory loading on the supply side added current production early in new product introduction may reduce the cost of future proresearchers of the strategic implications of the well known demand e g adoption and diffusion and supply e g experience effects dynamics have typically sought analytical solutions their success in this has been achieved partly by limiting the richness of the dynamics considered this paper describes a simulation modeling capability simstrat which trades off analytical solutions for richer more realistic representations of supply and demand we present the model and then the results of our initial investigations using simstrat when joined with new computer graphics capabilities the model is successful in identifying conditions conducive to skimand penetration pricing strategies

market share pioneering advantage a theoretical approach in this paper we present an industry in which a pioneer has entered accumulated capital in the form of goodwill and in his monopoly period has also reduced his cost of production as a result of some form of learning by doing at some later date a newcomer enters his production cost is higher than that of the monopolist at that date however due to diffusion of information the costs of the two firms equate at some future date once the new firm enters the market a duopolistic game begins in which the firms choose prices and investment rates analyzing this game we discover the conditions under which the final market shares no longer depend on the order of entry the initial cost advantage the length of the monopoly period or the length of time it took the newcomer to overcome the pioneer s cost advantage we analyze the speed and pattern of convergence to the final market shares and the capital path of the pioneer in his monopoly period depending on his beliefs concerning the possibility of entry

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future

competition strategy and price dynamics a theoretical and empirical investigation the authors explore how competition affects dynamic pricing of new products dynamics of diffusion saturation and cost reduction due to experience are all considered with emphasis on the last t

on the existence of expected utility with crra under stur abstract this note shows that in a standard framework for choice under uncertainty expected utility fails to exist with constant relative risk aversion crra when the endowment follows a stochastic unit root stur process

the advantage chain antecedents to rents from internal corporate ventures abstract in this article we argue that the resource based perspective on strategy offers a useful basis for understanding the contributions to the firm of corporate ventures the heart of the resource based view of the firm lies in arguments set forth by penrose and by nelson and winter penrose 1959 argued that differential mechanisms for resource combination and utilization result in heterogeneity among firms even among firms with similar factor endowments nelson and winter 1982 argued that behavior in particular behavior with respect to the utilization of firm resources becomes routinized over time people are often unable to describe or reconstruct well honed repetitive routines with ease van de ven 1986 consequently no two firms are likely to develop identical routines and it is often difficult for one firm to copy routines originated in another the idea that resources may be combined in routinized but relatively idiosyncratic ways suggests that firms will develop enduring differences in resource profiles and consequently in strategic potentialities over time consider the benefits a corporate venture can offer entering new markets making a new product developing a new technology or reconfiguring internal processes all require changes to existing resource configurations and routines these changes can allow the firm to discover ways of combining its resources and to the extent that the new combinations incorporate difficult to imitate routines it will take some time before that combination can be matched by competitors in other words venturing is one mechanism through which a firm gains superior insight about and access to firm specific resources with future rent potential value so a substantive and desirable outcome of venturing is the generation of valuable new resource combinations specific to the firm which it alone may exploit the article presents a model of those conditions that are necessary antecedents to streams of ricardian rent from the venture five such conditions are proposed all of which must be met if the firm is to derive rents from its venturing activities the first antecedent to securing rent streams from venturing is the emergence of causal understanding of the drivers of the venture s performance new causal understanding creates insight into new opportunity areas next team proficiency is essential to translate causal understanding into coordinated delivery of the product or service to the market new competences emerge as a result of evolving causal understanding and team proficiency which allow the organization to achieve new purposes from these new competences there may then develop distinctive competences that will differentiate the firm from competing organizations these distinctive competences may then become competitive advantages if they can be deployed in delivering product or service attributes that are preferred by the market to the offerings of competitors and competitors cannot readily duplicate them rents can only ensue when these inimitable competitive advantages allow a firm to achieve either distinctive efficiency in the firm or distinctive value for the customers the final section of the article offers ways in which this framework could be used first for research purposes and secondly by venture management

oligopoly models for optimal advertising when production costs obey a learning curve business policy questions frequently involve competitive encounters among several different firms oligopoly theory in economics was devised to answer similar questions but its results so far are largely confined to cases of monopoly one firm duopoly two firms and many firms wheat farmers the cases with n firms where 3 n 10 are of great interest to business policy but are rarely treated in the economics literature because of their extreme difficulty the natural mathematical model for studying such questions is the theory of differential games originally devised by r isaacs isaacs r 1975 differential games robert e krieger publishing co huntington new york originally published by john wiley sons new york 1965 for pursuer evader games later it was extended by j case case j h 1979 economics and the competitive process new york university press new york to nonzero sum differential games for application to questions of economic competition the problem of characterizing an optimal advertising policy over time is an important question in the field of marketing it is especially important during the period of the introduction of a new product and it is also during this time that the production learning curve phenomenon is most pronounced in this paper we study oligopoly models which combine elements of bass s demand growth model bass f m 1969 a new product growth model for consumer durables management sci 15 january 215 227 the vidale wolfe vidale m l h b wolfe 1957 an operations research study of sales response to advertising oper res 5 370 381 and ozga ozga s 1960 imperfect markets through lack of knowledge quart j econom 74 29 52 advertising models with linear or quadratic costs and the production learning curve hirschmann w p 1964 profit from the learning curve harvard bus rev 42 january february 125 139 the boston consulting group 1972 perspectives on experience the boston consulting group boston in the monopoly case n 1 the optimal advertising function is derived by applying green s theorem in the duopoly n 2 and triopoly n 3 cases we use discrete differential game models and find nash equilibrium solutions in each of these models the form of the optimal policy is easy to find but because of the complicated nature of the resulting differential equations closed form solutions for the optimal state and control trajectories are impossible to find hence we use a computer to compute these optimal trajectories and plot them for various parameter settings because 13n parameters must be chosen to define a model with n players a complete search of the parameter space is clearly impossible we content ourselves in this paper with presenting computer plots of four different interesting encounters of the triopoly model our methods can be extended to work just as well for competitive encounters among n players where 1 n 10 we believe that in this paper we have opened up the way to studying oligopoly theory with a small number of participants and under widely varying conditions although the lack of closed form solutions may disappoint some readers we feel that the easy availability of graphical solutions is a more than adequate substitute

investment and harvest strategies of the finnish forest sector under different forest tax policies a differential game approach with computer based decision aid abstract this study deals with the simultaneous solution of the investment harvest and taxation problems of the finnish forest sector these strategic questions involve competitive and contradictory interests among forestry the forest industry and society we build a computer based decision aid to support a decision maker who wants to analyze the consequences of different forest tax policies it is essential to this computational approach that only minor mathematical manipulations are needed to produce equilibrium open loop nash harvest and investment strategies moreover as a differential game approach it allows us to study the tax incidence we solve our model under three alternative tax policies lump sum unit and yield taxes

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines