Price Elasticity Dynamics over the Adoption Life Cycle

Parker, Philip M.

doi:10.2307/3172745

Cited by 82 publications

(61 citation statements)

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“…The price elasticities imply a declining pattern over time. This pattern is consistent with previous findings in the literature on durable products (e.g., Parker and Neelamegham, 1997). Nevertheless, it is important to answer why the elasticities decline over time.…”

Section: Short-term Elasticitiessupporting

confidence: 82%

“…A large literature in marketing has documented the time-varying impact of prices, advertising, distribution and other marketing-mix variables in several product categories (Parsons, 1975;Simon, 1979;Shoemaker, 1986;Lilien and Yoon, 1988;Tellis and Fornell, 1988;Parker, 1994;Parker and Neelamegham, 1997;Danaher et al, 2001). As marketing-mix effects change over the life cycle, the trade-offs to firms of leveraging available marketing instruments for generating sales also changes.…”

Section: Introductionmentioning

confidence: 99%

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Measuring marketing‐mix effects in the 32/64 bit video‐game console market

Nair

Sukumar

2009

J of Applied Econometrics

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SUMMARYWe investigate the short-and long-run effects of prices and software availability on the category-level diffusion of 32/64-bit video-game consoles in the USA. We adopt an estimation framework that allows for a flexible intrinsic growth pattern for the hardware consoles, and uses instrumental variables to control for the potential endogeneity of prices. We find significant long-term effects of prices and software availability on sales. We find that using a non-parametric hazard specification is important: imposing parametric forms results in elasticities that are up to 30% smaller. We use these results to derive implications for marketing policies over the life cycle of the industry.

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Section: Short-term Elasticitiessupporting

confidence: 82%

Section: Introductionmentioning

confidence: 99%

Measuring marketing‐mix effects in the 32/64 bit video‐game console market

Nair

Sukumar

2009

J of Applied Econometrics

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“…5 Hence, entry into new industries in the initial stages of the life cycle is made easy (Tirole, 1989). In addition, in the early stages of new markets price elasticity is low because of the novelty of the product (Parker, 1992). The small firm of the typical entrant has no disadvantage because there is no competitive pressure to fight the battle of scale economies.…”

Section: Technological Change and Entrepreneurshipmentioning

confidence: 99%

Unraveling the Shift to the Entrepreneurial Economy

Audretsch

Thurik²

2010

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Most TI discussion papers can be downloaded at http://www.tinbergen.nl. Terms of use: Documents in 1 Unraveling the Shift to the Entrepreneurial Economy D.B. Audretsch and A.R. ThurikInstitute for Development Strategies, Indiana University, daudrets@indiana.edu Erasmus University Rotterdam and EIM/Panteia, Zoetermeer, thurik@ese.eur.nl Abstract: A recent literature has emerged providing compelling evidence that a major shift in the organization of the developed economies has been taking place: away from what has been characterized as the managed economy towards the entrepreneurial economy. In particular, the empirical evidence provides consistent support that (1) the role of entrepreneurship has significantly increased, and (2) a positive relationship exists between entrepreneurial activity and economic performance. However, the factors underlying this observed shift have not been identified in a systematic manner. The purpose of this paper is to suggest some of the factors leading to this shift and implications for public policy. In particular, we find that a fundamental catalyst underlying the shift from the managed to the entrepreneurial economy involved the role of technological change. However, we also find that it was not just technological change but rather involved a number of supporting factors, ranging from the demise of the communist system, increased globalization, new competition for multinational firms and higher levels of prosperity. Recognition of the causes of the shift from the managed to the entrepreneurial economy suggests a rethinking of the public policy approach. Rather than the focus of directly and exclusively on promoting startups and SMEs, it may be that the current approach to entrepreneurship policy is misguided. The priority should not be on entrepreneurship policy but rather a more pervasive and encompassing approach, policy consistent with an entrepreneurial economy.

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“…Such price declines may be caused by learning effects on the supplier side. This may be especially the case for the products we study here, which Parker (1992) would refer to as "necessity" products because their markets are long lived and show high ultimate penetration levels. Parker also showed that in such necessity markets, early market growth will be sensitive to price declines.…”

Section: Technology Vintagementioning

confidence: 99%

Does new product growth accelerate across technology generations?

2009

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The academic literature on the growth acceleration of new products presents a paradox. On the one hand, the diffusion literature concludes that more recently introduced products show faster diffusion than older ones. On the other hand, technology generation literature argues that growth rate, at least as measured by diffusion parameters, remains constant across generations. We resolve this apparent paradox by testing whether growth acceleration occurs across technology generations while controlling for the passing of time. We check acceleration across 39 distinct technology generations in 12 product markets. The results show that intergeneration acceleration occurs in time to takeoff but not with respect to Market Lett (2010) The Wharton School, University of Pennsylvania, Philadelphia, PA, USA e-mail: peresren@wharton.upenn.edu diffusion parameters (i.e., p and q). We show that takeoff acceleration is mostly driven by technology vintage (i.e., the passage of time) rather than generational shifts. Thus, time is a factor that accelerates early growth, but generational shifts do not. This result also holds when controlling for the effects of market vintage when the market is either business-to-business or business-to-consumer as well as when the technology is process-or product-based.

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Price Elasticity Dynamics over the Adoption Life Cycle

Cited by 82 publications

References 0 publications

Measuring marketing‐mix effects in the 32/64 bit video‐game console market

Measuring marketing‐mix effects in the 32/64 bit video‐game console market

Unraveling the Shift to the Entrepreneurial Economy

Does new product growth accelerate across technology generations?

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