Dynamic Model of Markets of Successive Product Generations

Artikel

A dynamic microeconomic model is presented that establishes the price and unit sales evolution of heterogeneous goods consisting of successive homogenous product generations. It suggests that for a fast growing supply the mean price of the generations are governed by a logistic decline towards a floor price. It is shown that generations of a heterogeneous good are in mutual competition. Their market shares are therefore governed by a Fisher-Pry law while the total unit sales are governed by the lifecycle dynamics of the good. As a result the absolute unit sales of a generation exhibit a characteristic sales peak consisting of a rapid increase followed by a long tail. The presented approach shows that the evolution of successive product generations can be understood as an evolutionary adaptation process. The applicability of the model is confirmed by a comparison with empirical investigations on successive DRAM generations.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: British Journal of Economics, Management & Trade ; Volume: 10 ; Year: 2015-09-15 ; Issue: 3 ; Pages: 1-15 ; Tarakeswar, India: SCIENCEDOMAIN international

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Theory ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Subject: Product diffusion ; multiple generations ; evolutionary economics ; competition ; price evolution ; DRAM market

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kaldasch, Joachim
• Event: Veröffentlichung
• (who): SCIENCEDOMAIN international
• (where): Tarakeswar, India
• (when): 2015-09-15

Further information

• DOI: doi:10.9734/BJEMT/2015/20473
• Handle: http://hdl.handle.net/10419/118689
• Last update: 10.03.2025, 11:44 AM CET