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Market Segmentation and the Diffusion of Quality-Enhancing Innovations: The Case of Downhill Skiing

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  • James G. Mulligan

    (Department of Economics, University of Delaware, Newark, Delaware)

  • Emmanuel Llinares

    (Department of Economics, University of Delaware, Newark, Delaware)

Abstract

We report econometric results concerning the diffusion of detachable chairlifts in the United States that provide the first empirical evidence that the adoption of a technological innovation by a firm decreases the likelihood that a local competitor will also adopt it. We model the effect that an innovation in service speed has on a f's incentive to differentiate the quality of its service from that of its competitors. In our model, the incentive to adopt is negatively related to the number of competitors who have already adopted. Our empirical results support this hypothesis. © 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • James G. Mulligan & Emmanuel Llinares, 2003. "Market Segmentation and the Diffusion of Quality-Enhancing Innovations: The Case of Downhill Skiing," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 493-501, August.
  • Handle: RePEc:tpr:restat:v:85:y:2003:i:3:p:493-501
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Marc Rysman, 2003. "Differentiation Across Standards and Adoption Failure in 56K Modems," Working Papers 03-12, NET Institute, revised Dec 2003.
    2. James G. Mulligan, 2006. "Endogenously determined Quality and Price In a Two-Sector Competitive Service Market With an Application to Down-Hill Skiing," Working Papers 06-01, University of Delaware, Department of Economics.
    3. Wolff, François-Charles, 2014. "Lift ticket prices and quality in French ski resorts: Insights from a non-parametric analysis," European Journal of Operational Research, Elsevier, vol. 237(3), pages 1155-1164.
    4. Yang Liu and Taoyuan Wei, 2016. "Market and Non-market Policies for Renewable Energy Diffusion: A Unifying Framework and Empirical Evidence from Chinas Wind Power Sector," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    5. Van Butsic & Ellen Hanak & Robert G. Valletta, 2011. "Climate Change and Housing Prices: Hedonic Estimates for Ski Resorts in Western North America," Land Economics, University of Wisconsin Press, vol. 87(1), pages 75-91.
    6. Sergio Alessandrini, 2013. "Quality of Ski Resorts and Competition Between the Emilian Apennines and Altipiani Trentini. an Estimate of the Hedonic Price," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 5(1), pages 42-69, June.
    7. Martin Falk, 2011. "International Price Differences in Ski Lift Tickets," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(III), pages 303-336, September.
    8. James G. Mulligan & Nilotpal Das, 2006. "Item Pricing Laws, Supplier Behavior, and the Diffusion of Time-Saving Technology Innovations," Working Papers 06-11, University of Delaware, Department of Economics.
    9. Martin Falk, 2009. "Are multi-resort ski conglomerates more efficient?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 529-538.
    10. Bryan Bollinger, 2015. "Green technology adoption: An empirical study of the Southern California garment cleaning industry," Quantitative Marketing and Economics (QME), Springer, vol. 13(4), pages 319-358, December.
    11. James G. Mulligan & Nilotpal Das, 2004. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations: The Adoption of Optical Scanners by U.S. Supermarkets."," Working Papers 04-06, University of Delaware, Department of Economics.
    12. Angelique Augereau & Shane Greenstein & Marc Rysman, 2004. "Coordination vs. Differentiation in a Standards War: 56K Modems," NBER Working Papers 10334, National Bureau of Economic Research, Inc.
    13. Mark M. Spiegel, 2009. "Monetary and Financial Integration in the EMU: Push or Pull?," Review of International Economics, Wiley Blackwell, pages 751-776.
    14. Das Nilotpal & Falaris Evangelos M & Mulligan James G, 2009. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, pages 1-37.
    15. Falk, Martin & Hagsten, Eva, 2017. "Climate Zone Crucial for Efficiency of Ski Lift Operators," MPRA Paper 77517, University Library of Munich, Germany.
    16. James G. Mulligan & Nilotpal Das, 2005. "Persistent Adoption of Time-Saving Process Innovations," Working Papers 05-03, University of Delaware, Department of Economics.
    17. Matthias Sutter & Martin G. Kocher & Daniela Glätzle-Rüetzler & Stefan T. Trautmann, 2013. "Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior," American Economic Review, American Economic Association, pages 510-531.
    18. Marc Fusaro, 2009. "The rank, stock, order and epidemic effects of technology adoption: an empirical study of bounce protection programs," The Journal of Technology Transfer, Springer, vol. 34(1), pages 24-42, February.

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