Subsidizing New Technology Adoption in a Stackelberg Duopoly: Cases of Substitutes and Complements

Hattori, Masahiko; Tanaka, Yasuhito

doi:10.1007/s40797-016-0031-1

Cited by 13 publications

(7 citation statements)

References 15 publications

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“…New technologies have been the prime force of change across all domains (Mahardika et al , 2019; Preece, 1988; Hattori and Tanaka, 2016). The adoption of cyber-based technologies to conduct business and deliver services has become a global driver of change.…”

Section: Methodsmentioning

confidence: 99%

Actionable strategy framework for digital transformation in AECO industry

Bhattacharya

Momaya

2021

ECAM

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PurposeThe Fourth Industrial Revolution (4IR) holds the potential to improve capabilities- and technology-based innovation, which will enable breakout for architectural, engineering, construction and operation and maintenance (AECO) companies, for international competitiveness. Though the top management of such companies is convinced on the utility of the applications, they are unsure on the strategy of implementing the same. The objective of this research is to suggest a strategy framework for digital transformation of the AECO value chain.Design/methodology/approachThe nascent level of research on 4IR in construction necessitated the adoption of the integrative review methodology for the study. Extensive literature review of research on strategy and 4IR has been utilized to establish the validity of the first two pillars, namely “a strategy of simple rules in a complex environment; and deployment of dynamic capabilities.” The validation of a construct for the third pillar of “confluence of change and continuity forces” has been achieved via hypothesis testing of data obtained through a questionnaire survey.FindingsThe present study has integrated three diverse ideas of strategy, named as the pillars, to facilitate sustainable digital transformation. Within the third pillar, top three continuity forces which offer resistance to change are organization culture, existing delivery processes and networks, and existing standard operating procedures. On the other hand, the leading drivers of change are needs of competitiveness; global industry trends and the advent of new technologies/innovations.Research limitations/implicationsThis provides a practical approach to operationalize digital transformation of the AECO at an organization level. The validation relied on opinion and perspectives of a sample frame in the Indian context, which was its limitation.Originality/valueThis paper suggests a strategy framework of three pillars to help address specific strategy dilemmas during implementation of digital transformation of particular organizations in AECO. The study contributes to both theory and practice by helping leaders of AECO companies, associations, policymakers and the academia to strategize transformations successfully.

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Section: Methodsmentioning

confidence: 99%

Actionable strategy framework for digital transformation in AECO industry

Bhattacharya

Momaya

2021

ECAM

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“…In the above model, γ is the control parameter that can vary between zero and one. Setting γ = 0 makes Eq (27) identical to Eq (13), which is the original and uncontrolled model. γ = 1 leads to q i (t + 1) = q i (t), i = 1, 2 forcefully that means the model must converge to its stable equilibrium point (if any).…”

Section: Plos Onementioning

confidence: 99%

“…Stackelberg competition, or the Stackelberg game, is a strategic game in the economics of sequential and imperfect competition [ 26 ]. In economic terms, the imperfection of competition in the market refers to a market in which monopolistic elements and factors are more or less present [ 27 ]. In other words, producers and consumers can influence prices in the market to some extent [ 28 ].…”

Section: Introductionmentioning

confidence: 99%

The dynamics of a duopoly Stackelberg game with marginal costs among heterogeneous players

et al. 2023

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One of the famous economic models in game theory is the duopoly Stackelberg model, in which a leader and a follower firm manufacture a single product in the market. Their goal is to obtain the maximum profit while competing with each other. The desired dynamics for a firm in a market is the convergence to its Nash equilibrium, but the dynamics of real-world markets are not always steady and can result in unpredictable market changes that exhibit chaotic behaviors. On the other hand, to approach reality more, the two firms in the market can be considered heterogeneous. The leader firm is bounded rationale, and the follower firm is adaptable. Modifying the cost function that affects the firms’ profit by adding the marginal cost term is another step toward reality. We propose a Stackelberg model with heterogeneous players and marginal costs, which exhibits chaotic behavior. This model’s equilibrium points, including the Nash equilibrium, are calculated by the backward induction method, and their stability analyses are obtained. The influence of changing each model parameter on the consequent dynamics is investigated through one-dimensional and two-dimensional bifurcation diagrams, Lyapunov exponents spectra, and Kaplan-Yorke dimension. Eventually, using a combination of state feedback and parameter adjustment methods, the chaotic solutions of the model are successfully tamed, and the model converges to its Nash equilibrium.

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“…Wang and Yang (2004) consider the case where the licensor has production capacity under the Stackelberg duopoly. Hattori and Tanaka (2015, 2016a) study adoption of new technology under Cournot duopoly and Stackelberg duopoly. Sen and Tauman (2007) compare the license system in detail, namely, when the licensor is an outsider and when it is an incumbent firm, using the combination of royalties and fixed fees.…”

Section: Concise Literature Reviewmentioning

confidence: 99%

License and entry strategies for an outside innovator in Stackelberg duopoly with royalty and fixed fee under vertical differentiation**

Hattori

Tanaka

2019

Int J of Economic Theory

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We examine a choice of options for an outside innovating firm in Stackelberg duopoly under vertical differentiation. The options for an innovating firm are to enter the market with or without licensing its technology for producing a higher‐quality good by a combination of royalty and fixed license fee, and to license its technology without entry. When the innovating firm licenses its technology to the incumbent firm without entry, its optimal royalty rate is zero. When the innovating firm enters the market with a license to the incumbent firm, and the cost function is strictly concave, its optimal royalty rate is one such that the incumbent firm drops out of the market with a negative fixed license fee. If the cost function is strictly convex, there is an internal solution of the positive optimal royalty rate with positive or negative fixed license fee. Without entry cost, if the cost function is strictly concave, the entry without license and entry with license strategies are optimal, and if it is strictly convex, the entry with license strategy is optimal.

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Subsidizing New Technology Adoption in a Stackelberg Duopoly: Cases of Substitutes and Complements

Cited by 13 publications

References 15 publications

Actionable strategy framework for digital transformation in AECO industry

Actionable strategy framework for digital transformation in AECO industry

The dynamics of a duopoly Stackelberg game with marginal costs among heterogeneous players

License and entry strategies for an outside innovator in Stackelberg duopoly with royalty and fixed fee under vertical differentiation**

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