Business Economics and Public Policy Papers

Document Type

Journal Article

Date of this Version

1-2005

Publication Source

Journal of Economic Dynamics and Control

Volume

29

Issue

1-2

Start Page

245

Last Page

276

DOI

10.1016/j.jedc.2003.04.012

Abstract

Consider a setting in which firms randomly discover new ideas that affect their products or services and implement favorable ones. At the same time that firms are adapting their offerings, consumers are searching among firms for the best match. It is shown that implicit in these dual dynamics is an increasing returns mechanism which can result in one firm dominating the market in the long run. The conditions under which there is sustained market dominance are characterized.

Copyright/Permission Statement

© 2005. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Comments

At the time of publication, author Joseph E. Harrington Jr. was affiliated with the John Hopkins University. Currently, he is a faculty member in the Business, Economics, Public Policy Department of the Wharton School at the University of Pennsylvania.

Keywords

market dominance, innovation, search

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Date Posted: 27 November 2017

This document has been peer reviewed.