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Dynamic Model of Markets of Homogenous Non-Durable

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  • Joachim Kaldasch

Abstract

A new microeconomic model is presented that aims at a description of the long-term unit sales and price evolution of homogeneous non-durable goods in polypoly markets. It merges the product lifecycle approach with the price dispersion dynamics of homogeneous goods. The model predicts a minimum critical lifetime of non-durables in order to survive. Under the condition that the supply side of the market evolves much faster than the demand side the theory suggests that unsatisfied demands are present in the first stages of the lifecycle. With the growth of production capacities these demands disappear accompanied with a logistic decrease of the mean price of the good. The model is applied to electricity as a non-durable satisfying the model condition. The presented theory allows a deeper understanding of the sales and price dynamics of non-durables.

Suggested Citation

  • Joachim Kaldasch, 2011. "Dynamic Model of Markets of Homogenous Non-Durable," Papers 1109.5791, arXiv.org, revised Jul 2015.
  • Handle: RePEc:arx:papers:1109.5791
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    References listed on IDEAS

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    1. Kaldasch, Joachim, 2011. "The experience curve and the market size of competitive consumer durable markets," MPRA Paper 33370, University Library of Munich, Germany.
    2. Vasicek, Oldrich, 1977. "An equilibrium characterization of the term structure," Journal of Financial Economics, Elsevier, vol. 5(2), pages 177-188, November.
    3. Kaldasch, Joachim, 2015. "The Product Life Cycle of Durable Goods," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-17.
    4. Vasicek, Oldrich Alfonso, 1977. "Abstract: An Equilibrium Characterization of the Term Structure," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 12(04), pages 627-627, November.
    5. Uwe Cantner & Jens J. Krüger & René Söllner, 2012. "Product quality, product price, and share dynamics in the German compact car market," Industrial and Corporate Change, Oxford University Press, vol. 21(5), pages 1085-1115, October.
    6. Kaldasch, Joachim, 2015. "Dynamic Model of the Price Dispersion of Homogeneous Goods," MPRA Paper 64723, University Library of Munich, Germany.
    7. Sandro Sapio, 2006. "An Empirically Based Model of the Supply Schedule in Day-Ahead Electricity Markets," LEM Papers Series 2006/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    8. Kaldasch, Joachim, 2011. "Evolutionary model of an anonymous consumer durable market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(14), pages 2692-2715.
    9. Kaldasch, Joachim, 2014. "Evolutionary model of stock markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 415(C), pages 449-462.
    10. Bottazzi, G. & Sapio, S. & Secchi, A., 2005. "Some statistical investigations on the nature and dynamics of electricity prices," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 355(1), pages 54-61.
    11. repec:dau:papers:123456789/607 is not listed on IDEAS
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    Cited by:

    1. Kaldasch, Joachim, 2012. "Evolutionary model of the personal income distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(22), pages 5628-5642.
    2. Kaldasch, Joachim, 2015. "The Product Life Cycle of Durable Goods," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-17.
    3. Kaldasch, Joachim, 2015. "Dynamic Model of Markets of Successive Product Generations," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-15.

    More about this item

    JEL classification:

    • D - Microeconomics
    • P42 - Economic Systems - - Other Economic Systems - - - Productive Enterprises; Factor and Product Markets; Prices
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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