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Complementary Products (complementary + products)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting75%

Selected Abstracts

Some simple economics of GM food

ECONOMIC POLICY, Issue 33 2001
Dietmar Harhoff
Public opposition to the genetic engineering of food crops (GM food) has not been based solely on concern about biological risks. Economic risks have been widely cited too: the fear that the world's food supply will be concentrated in the hands of a few large firms, the fear that such firms will engage or are already engaging in anti,competitive practices, and the fear of the transfer of ownership rights over genetic resources to the private sector. Are these fears justified? We argue that the GM food industry may be on course for further consolidation, and this could be anti,competitive. In fact, policymakers face a dilemma: a stringent regulatory approval process enhances food safety, but at the cost of increasing market concentration. We argue also that the integration of seed and agri,chemical manufacturers may bias the introduction of GM traits in undesirable directions. Some business practices (such as tie,in contracts between seeds and complementary products such as herbicides) may have an exclusionary motive that warrants scrutiny on anti,competitive grounds, while some other practices (such as the use of terminator genes) appear more benign. Finally, we argue against granting patents on genes or even on gene ,functions'. Doing so may delay the development of socially beneficial applications. [source]

Randal Heeb Innovation and Vertical Integration in Complementary Markets

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 3 2003
Randal Heeb
This paper studies vertical integration by an essential-good monopolist into complementary markets. Unlike previous studies of complementary products, consumers are allowed to purchase some components of a complementary basket, but not others. Two different pricing strategies by the integrated firm may emerge. In mass-market equilibria, the price of the complement under integration is zero and it is given away with the essential good. Niche-market equilibria have more conventional pricing. This dichotomy is consistent with consumer software pricing. Integration enhances consumer and total surplus, unless it leads to exit by the higher-quality rival, in which case welfare is reduced. Exit is most likely when it is least damaging to consumer welfare. Integration reduces innovation by the rival firm. The effect on innovation by the integrated firm is ambiguous, but numerical computation of an extended model indicates that integration increases the innovation of the integrated firm and enhances welfare. [source]

Structural properties of network revenue management models: An economic perspective

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 8 2006
Alec Morton
Abstract Many revenue management problems have a network aspect. In this paper, we argue that a network can be thought of as a system of substitutable and complementary products, and the value of a revenue management model should be supermodular or submodular in the availability of two resources as the resources are economic substitutes or complements. We demonstrate that this is true in the case of a two-resource dynamic stochastic revenue management model and show how this applies for multi-resource deterministic static revenue management models. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006 [source]

Intellectual Property, Architecture, and the Management of Technological Transitions: Evidence from Microsoft Corporation

THE JOURNAL OF PRODUCT INNOVATION MANAGEMENT, Issue 3 2009
Alan MacCormack
Many studies highlight the challenges facing incumbent firms in responding effectively to major technological transitions. Though some authors argue that these challenges can be overcome by firms possessing what have been called dynamic capabilities, little work has described in detail the critical resources that these capabilities leverage or the processes through which these resources accumulate and evolve. This paper explores these issues through an in-depth exploratory case study of one firm that has demonstrated consistently strong performance in an industry that is highly dynamic and uncertain. The focus for the present study is Microsoft, the leading firm in the software industry. The focus on Microsoft is motivated by providing evidence that the firm's product performance has been consistently strong over a period of time in which there have been several major technological transitions,one indicator that a firm possesses dynamic capabilities. This argument is supported by showing that Microsoft's performance when developing new products in response to one of these transitions,the growth of the World Wide Web,was superior to a sample of both incumbents and new entrants. Qualitative data are presented on the roots of Microsoft's dynamic capabilities, focusing on the way that the firm develops, stores, and evolves its intellectual property. Specifically, Microsoft codifies knowledge in the form of software "components," which can be leveraged across multiple product lines over time and accessed by firms developing complementary products. The present paper argues that the process of componentization, the component "libraries" that result, the architectural frameworks that define how these components interact, and the processes through which these components are evolved to address environmental changes represent critical resources that enable the firm to respond to major technological transitions. These arguments are illustrated by describing Microsoft's response to two major technological transitions. [source]