IDEAS home Printed from https://ideas.repec.org/p/bol/bodewp/470.html
   My bibliography  Save this paper

Self-organised Criticality and Technological Convergence

Author

Listed:
  • R. Amir
  • A. Mantovani

Abstract

Consider a marketing division of a monopoly firm that faces two marketing options: Market enlargement and elasticity improvement. These options are conceived in terms of the target of the firm s advertising campaigns: Potential new consumers versus existing consumers. Using a CES demand function in a simple model, we demonstrate that the two activities are complementary, so that for some cost configurations, the firm will find it profitable to implement the two options together when either option alone would result in a loss. This calls for the marketing division to be integrated, rather than decentralized.

Suggested Citation

  • R. Amir & A. Mantovani, 2003. "Self-organised Criticality and Technological Convergence," Working Papers 470, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:470
    as

    Download full text from publisher

    File URL: https://amsacta.unibo.it/4824/1/470.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Susan Athey & Armin Schmutzler, 1995. "Product and Process Flexibility in an Innovative Environment," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 557-574, Winter.
    2. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
    3. Avinash Dixit & Victor Norman, 1978. "Advertising and Welfare," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 1-17, Spring.
    4. Amir, R., 1996. "Cournot oligopoly and theory of supermodular games," LIDAM Reprints CORE 1228, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Vives, Xavier, 1990. "Nash equilibrium with strategic complementarities," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 305-321.
    6. Amir, Rabah, 1996. "Cournot Oligopoly and the Theory of Supermodular Games," Games and Economic Behavior, Elsevier, vol. 15(2), pages 132-148, August.
    7. James W. Friedman, 1983. "Advertising and Oligopolistic Equilibrium," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 464-473, Autumn.
    8. Ron Adner & Daniel Levinthal, 2001. "Demand Heterogeneity and Technology Evolution: Implications for Product and Process Innovation," Management Science, INFORMS, vol. 47(5), pages 611-628, May.
    9. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrea Mantovani, 2006. "Complementarity between product and process innovation in a monopoly setting," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(3), pages 219-234.
    2. Christine Halmenschlager & Andrea Mantovani & Michael Troege, 2011. "Demand Expansion And Elasticity Improvement As Complementary Marketing Goals," Manchester School, University of Manchester, vol. 79(1), pages 145-158, January.
    3. Amir, Rabah & Wooders, John, 2000. "One-Way Spillovers, Endogenous Innovator/Imitator Roles, and Research Joint Ventures," Games and Economic Behavior, Elsevier, vol. 31(1), pages 1-25, April.
    4. Lambertini, Luca & Mantovani, Andrea, 2009. "Process and product innovation by a multiproduct monopolist: A dynamic approach," International Journal of Industrial Organization, Elsevier, vol. 27(4), pages 508-518, July.
    5. Alessandro Fedele & Andrea Mantovani, 2008. "Complementarity, Coordination, and Credit," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(2), pages 230-253, June.
    6. Rabah Amir, 2005. "Supermodularity and Complementarity in Economics: An Elementary Survey," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 636-660, January.
    7. Alessandro Fedele & Francesco Liucci & Andrea Mantovani, 2009. "Credit availability in the crisis: the European investment bank group," Working Papers 0913, University of Brescia, Department of Economics.
    8. Amir, Rabah & Lazzati, Natalia, 2011. "Network effects, market structure and industry performance," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2389-2419.
    9. Rabah Amir & David Encaoua & Yassine Lefouili, 2011. "Per-Unit Royalty vs Fixed Fee: The Case of Weak Patents," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00595493, HAL.
    10. Christian Ewerhart, 2020. "Ordinal potentials in smooth games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(4), pages 1069-1100, November.
    11. Echenique, Federico, 2004. "A characterization of strategic complementarities," Games and Economic Behavior, Elsevier, vol. 46(2), pages 325-347, February.
    12. Desgranges, Gabriel & Gauthier, Stéphane, 2016. "Rationalizability and efficiency in an asymmetric Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 163-176.
    13. Amir, Rabah & Bloch, Francis, 2009. "Comparative statics in a simple class of strategic market games," Games and Economic Behavior, Elsevier, vol. 65(1), pages 7-24, January.
    14. Uttiya Paul & Tarun Sabarwal, 2023. "Directional monotone comparative statics in function spaces," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 153-169, April.
    15. Rabah Amir, 2018. "Special issue: supermodularity and monotone methods in economics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(3), pages 547-556, October.
    16. Zuniga, Pluvia & Crespi, Gustavo, 2013. "Innovation strategies and employment in Latin American firms," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 1-17.
    17. Peter Arendorf Bache & Anders Laugesen, 2013. "Monotone Comparative Statics for the Industry Composition," Economics Working Papers 2013-10, Department of Economics and Business Economics, Aarhus University.
    18. Emin Karagözoğlu & Kerim Keskin & Çağrı Sağlam, 2024. "Submodularity and supermodularity in contest games," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(2), pages 182-198, June.
    19. Gama, Adriana & Rietzke, David, 2019. "Monotone comparative statics in games with non-monotonic best-replies: Contests and Cournot oligopoly," Journal of Economic Theory, Elsevier, vol. 183(C), pages 823-841.
    20. Plan, Asaf, 2023. "Symmetry in n-player games," Journal of Economic Theory, Elsevier, vol. 207(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bol:bodewp:470. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Dipartimento Scienze Economiche, Universita' di Bologna (email available below). General contact details of provider: https://edirc.repec.org/data/sebolit.html .

    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.