Upgrading or Replacing: A Decision for Innovation Products with Network Ezternalities
Upgrading or replacing is an important choice for products innovation, especially for the products with network externalities. This paper develops a two-period duopoly model to describe the influence of compatibility with the established industry standard, by using the method of undercut -proof equilibrium in game theory. Two factors, including product quality and expected market share, are added in the model to analyze profits from the decisions of upgrading or replacing in products innovation. The results show that there is no unique optimal strategy for the firms, and firms have to make their decisions according to the qualities and the expected market share of up grade or replacement products, as well as the install base of the original product.
product innovation network ezternalities undercut -proof equilibrium ezpected market share
Sun Shuzhen Xu Di
School of Management, Xiamen University, Xiamen, P.R.China, 361005
国际会议
4th International Conference on Productinnovation Management(第四届产品创新管理国际会议)
武汉
英文
107-114
2009-08-22（万方平台首次上网日期，不代表论文的发表时间）