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Commitment to a Process Innovation: Nucor, USX, and Thin‐Slab Casting

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  • Pankaj Ghemawat

Abstract

This paper studies the order of adoption of a process innovation, thin‐slab casting, by U.S. steel makers. A game‐theoretic model of technology adoption with capacity constraints indicates that incumbents are likely to trail entrants in adopting process technologies that reduce the minimal scale required to compete. Evidence from the case study also indicates, however, that the sorts of interactive effects emphasized by game‐theoretic models may be dominated by the effects of competitors' heterogeneous precommitments.

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  • Pankaj Ghemawat, 1993. "Commitment to a Process Innovation: Nucor, USX, and Thin‐Slab Casting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 135-161, March.
    • Handle: RePEc:bla:jemstr:v:2:y:1993:i:1:p:135-161
    DOI: 10.1111/j.1430-9134.1993.00135.x
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    References listed on IDEAS

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    1. Sharon Oster, 1982. "The Diffusion of Innovation among Steel Firms: The Basic Oxygen Furnace," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 45-56, Spring.
    2. Judith R. Gelman & Steven C. Salop, 1983. "Judo Economics: Capacity Limitation and Coupon Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 315-325, Autumn.
    3. Reinganum, Jennifer F, 1983. "Uncertain Innovation and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 73(4), pages 741-748, September.
    4. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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    Cited by:

    1. Luís Cabral & Cristian Dezső, 2008. "Technology Adoption with Multiple Alternative Designs and the Option to Wait," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(2), pages 413-441, June.
    2. Mikko Ketokivi & Joseph T. Mahoney, 2020. "Transaction Cost Economics As a Theory of Supply Chain Efficiency," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 1011-1031, April.
    3. David A. Hennessy, 1998. "Technology Adoption and Welfare under a Monopoly: An Illustration of Microeconomic Policy Analysis," The Journal of Economic Education, Taylor & Francis Journals, vol. 29(2), pages 111-117, June.
    4. Byong‐Duk Rhee & Seth W. Norton, 2001. "Strategic Quality Decisions under Heterogeneous Resource Endowments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(2), pages 235-264, June.
    5. Han T. J. Smit & Lenos Trigeorgis, 2017. "Strategic NPV: Real Options and Strategic Games under Different Information Structures," Strategic Management Journal, Wiley Blackwell, vol. 38(13), pages 2555-2578, December.
    6. Hillary Ekisa Nambanga & Jianpei Li, 2021. "Threat of Entry, Complete Information and Pricing," International Journal of Science and Business, IJSAB International, vol. 5(5), pages 161-182.
    7. Robert A. Ritz, 2009. "Carbon leakage under incomplete environmental regulation: An industry-level approach," Economics Series Working Papers 461, University of Oxford, Department of Economics.
    8. Pankaj Ghemawat, 1994. "Competitive Advantage and Internal Organization: Nucor Revisited," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(4), pages 685-717, December.
    9. Levin, Mark (Левин, Марк) & Matrosova, Kseniya (Матросова, Ксения), 2015. "Innovation management based concidering advertising and complementarity of public and private levels of technology [Управление Инновациями С Учетом Рекламы И Комплементарности Общественного И Частн," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 109-132.
    10. Richard A. Jensen, 2004. "Multiplant Firms and Innovation Adoption and Diffusion," Southern Economic Journal, John Wiley & Sons, vol. 70(3), pages 661-671, January.

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