Diversification: a road to inefficiency in product innovations?

Dawid H, Reimann M (2011)
Journal of Evolutionary Economics 21(2): 191-229.

Journal Article | Published | English

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Motivated by recent empirical observations made in industries such as the automobile industry, this paper employs an agent-based industry simulation model to examine the strategic relationship between product diversification strategies and some aspects of the product innovation strategy of a single producer. In particular, it is established that an increase in the average degree of product diversification in an industry increases the incentive for a producer to reduce the time to market for innovations at the expense of product quality. However, if all firms adapt their strategies according to these incentives, this results in a severe loss of average firm profits in the industry and also to a reduction in consumer surplus. It is then studied how the strength of this dilemma depends on several parameters describing the market structure and patent policy.
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Dawid H, Reimann M. Diversification: a road to inefficiency in product innovations? Journal of Evolutionary Economics. 2011;21(2):191-229.
Dawid, H., & Reimann, M. (2011). Diversification: a road to inefficiency in product innovations? Journal of Evolutionary Economics, 21(2), 191-229.
Dawid, H., and Reimann, M. (2011). Diversification: a road to inefficiency in product innovations? Journal of Evolutionary Economics 21, 191-229.
Dawid, H., & Reimann, M., 2011. Diversification: a road to inefficiency in product innovations? Journal of Evolutionary Economics, 21(2), p 191-229.
H. Dawid and M. Reimann, “Diversification: a road to inefficiency in product innovations?”, Journal of Evolutionary Economics, vol. 21, 2011, pp. 191-229.
Dawid, H., Reimann, M.: Diversification: a road to inefficiency in product innovations? Journal of Evolutionary Economics. 21, 191-229 (2011).
Dawid, Herbert, and Reimann, Marc. “Diversification: a road to inefficiency in product innovations?”. Journal of Evolutionary Economics 21.2 (2011): 191-229.
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