IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v69y2025i6d10.1007_s00181-025-02837-7.html
   My bibliography  Save this article

Product lines and new product introduction: competition versus cannibalization in the personal computer industry

Author

Listed:
  • George Deltas

    (University of Illinois, Urbana-Champaign)

  • Eleftherios Zacharias

    (Athens School of Economics and Business)

Abstract

We examine the adoption by personal computer manufacturers of newly developed Intel processors. We find that firms that currently offer the top-of-the-line processor are more likely to be early adopters of a newly developed chip, regardless of whether or not that chip is the new top-of-the-line processor. Firms that are currently offering a processor that is adjacent in performance to a new chip, but slower, are not more likely to adopt that chip when it is not top of the line. These findings account for the overall depth of a firm’s product line and its propensity to be an early adopter of new Intel processors. The evidence suggests that, in the personal computer industry, competitive considerations outweigh price discrimination and product cannibalization considerations at the top of market where margins are high. Firms with high-end products adopt new processors to stem the loss of high margin consumers to competitors and to discourage these competitors from offering the new processors. The evidence does not support the notion that firms without top-of-the-line products attempt to “leapfrog” the competition.

Suggested Citation

  • George Deltas & Eleftherios Zacharias, 2025. "Product lines and new product introduction: competition versus cannibalization in the personal computer industry," Empirical Economics, Springer, vol. 69(6), pages 3437-3461, December.
    • Handle: RePEc:spr:empeco:v:69:y:2025:i:6:d:10.1007_s00181-025-02837-7
    DOI: 10.1007/s00181-025-02837-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-025-02837-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-025-02837-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:69:y:2025:i:6:d:10.1007_s00181-025-02837-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.