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Author: | Kristiansen, E.G. |
Title: | R&D buyers' waiting option |
Journal: | Journal of Industrial Economics
2006 : MAR, VOL. 54:1, p. 31-42 |
Index terms: | consumer behaviour consumer durables markets competition innovation R&D models |
Language: | eng |
Abstract: | This study analyzes how buyers' waiting option may feed back into firm's timing of innovations. Buyers are shown to have inefficiently weak incentives to wait for potentially better products which induces firms to accelerate the introduction of new products. In addition, buyers' inclination to adopt new technologies prematurely expands firms' scope for preemption of potential rivals. The analysis sheds light on R&D competition in durable goods markets such as the market for aircraft. |
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