Authors: Hans-Werner Gottinger
Addresses: Institute of Management Sciences, Maastricht, Kwansei Gakuin University (KGU), Kobe-Sanda Campus, Japan
Abstract: We look at a competitive situation in network markets where there is uncertain technological development in product/process technologies. Firms ||price|| compete in those markets to gain market share before any of them succeeds in getting an innovation to move ahead of its rival(s). If the firms are in a technology race and the probability of innovation success is small, then a firm with a bigger network advantage is likely to attract more customers in the absence of innovation. If, however, any of those firms expect innovation with a high probability and none of them have a big advantage, then they keep on sharing the market until the innovation occurs.
Keywords: network economics; market structure; pricing; firm strategy; market performance; network markets; technological innovation; market share; stochastic racing; competition; technology race; high technology firms; hi-tech firms.
International Journal of Technology, Policy and Management, 2004 Vol.4 No.3, pp.240 - 256
Published online: 31 Jan 2005 *Full-text access for editors Access for subscribers Purchase this article Comment on this article