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Dynamic Competition (dynamic + competition)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	75%

Selected Abstracts

Dynamic Competition with Experience Goods

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 1 2006
J. Miguel Villas-Boas
This paper considers dynamic competition in the case in which consumers are only able to learn about their preferences for a certain product after experiencing it. After trying a product a consumer has more information about that product than about untried products. When competing in such a market firms with more sales in the past have an informational advantage because more consumers know their products. If products provide a better-than-expected fit with greater likelihood, taking advantage of that informational advantage may lead to an informational disadvantage in the future. This paper considers this competition with an infinite horizon model in a duopoly market with overlapping generations of consumers. Two effects are identified: On one hand marginal forward-looking consumers realize that by purchasing a product in the current period will be charged a higher expected price in the future. This effect results in reduced price sensitivity and higher equilibrium prices. On the other hand, forward-looking firms realize that they gain in the future from having a greater market share in the current period and compete more aggressively in prices. For similar discount factors for consumers and firms, the former effect is more important, and prices are higher the greater the informational advantages. The paper also characterizes oscillating market share dynamics, and comparative statics of the equilibrium with respect to consumer and firm patience, and the importance of the experience in the ex post valuation of the product. [source]

Learning-by-Doing, Organizational Forgetting, and Industry Dynamics

ECONOMETRICA, Issue 2 2010
David Besanko
Learning-by-doing and organizational forgetting are empirically important in a variety of industrial settings. This paper provides a general model of dynamic competition that accounts for these fundamentals and shows how they shape industry structure and dynamics. We show that forgetting does not simply negate learning. Rather, they are distinct economic forces that interact in subtle ways to produce a great variety of pricing behaviors and industry dynamics. In particular, a model with learning and forgetting can give rise to aggressive pricing behavior, varying degrees of long-run industry concentration ranging from moderate leadership to absolute dominance, and multiple equilibria. [source]

Permeability of the continental crust: dynamic variations inferred from seismicity and metamorphism

GEOFLUIDS (ELECTRONIC), Issue 1-2 2010
S. E. INGEBRITSEN
Geofluids (2010) 10, 193,205 Abstract The variation of permeability with depth can be probed indirectly by various means, including hydrologic models that use geothermal data as constraints and the progress of metamorphic reactions driven by fluid flow. Geothermal and metamorphic data combine to indicate that mean permeability (k) of tectonically active continental crust decreases with depth (z) according to log k , ,14,3.2 log z, where k is in m2 and z in km. Other independently derived, crustal-scale k,z relations are generally similar to this power-law curve. Yet there is also substantial evidence for local-to-regional-scale, transient, permeability-generation events that entail permeabilities much higher than these mean k,z relations would suggest. Compilation of such data yields a fit to these elevated, transient values of log k , ,11.5,3.2 log z, suggesting a functional form similar to that of tectonically active crust, but shifted to higher permeability at a given depth. In addition, it seems possible that, in the absence of active prograde metamorphism, permeability in the deeper crust will decay toward values below the mean k,z curves. Several lines of evidence suggest geologically rapid (years to 103 years) decay of high-permeability transients toward background values. Crustal-scale k,z curves may reflect a dynamic competition between permeability creation by processes such as fluid sourcing and rock failure, and permeability destruction by processes such as compaction, hydrothermal alteration, and retrograde metamorphism. [source]