Accession Number : AD0261591

Title :   COMPETITION THROUGH THE INTRODUCTION OF NEW PRODUCTS

Corporate Author : PRINCETON UNIV N J

Personal Author(s) : REICHARDT,ROBERT

Report Date : 10 JUL 1961

Pagination or Media Count : 1

Abstract : Competitive situations among oligopolists who intend to introduce similar new products are studied. Game-theoretical models are developed in which one or two of the following parameters are specified as strategic variables: starting time for development research, expenditure for research, size of new equipment, advertising costs, and price-supply policies. Equilibria are obtained in several models by the use of the Nash equilibrium point theory for non-cooperative games. For the treatment of competition through the price-supply policies, a dynamic model is developed using the new approach to demand theory as formulated by Morgenstern. Cooperation among firms which are willing to introduce similar new goods is considered. Here cooperation takes place in the form of patent releases. In the first model, the starting time for research as well as willingness to cooperate are parameters of action; in the second model the behavior during the negotiations influences the payoffs. In both cases non-cooperative equilibria in the sense of Nash are obtained. Bargaining schemes for fixing side payments (in this case patent royalties) are studied. The phonograph record and the chemical industry are examples of industries which introduce large numbers of new products either in a short time period or at the same time. A study of the case in which the number of new products per time unit can be varied is discussed. (Author)

Descriptors :   *ECONOMICS, *GAME THEORY, *INDUSTRIAL PRODUCTION, COSTS, MATHEMATICS, PRODUCTION

Distribution Statement : APPROVED FOR PUBLIC RELEASE