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Monopolistic Competition and New Products: A Conjectural Equilibrium Approach

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  • Bogliacino, F
  • Rampa, G

Abstract

In this paper we generalize the heterogeneous risk adverse agents model of diffusion of new products in a multi-firm, heterogeneous and interacting agents environment. We use a model of choice under uncertainty based on Bayesian theory. We discuss the possibility of product failures, the set of equilibria, their stability and some welfare properties.

Suggested Citation

  • Bogliacino, F & Rampa, G, 2009. "Monopolistic Competition and New Products: A Conjectural Equilibrium Approach," MPRA Paper 15120, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15120
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    5. Bertoletti, Paolo & Epifani, Paolo, 2014. "Monopolistic competition: CES redux?," Journal of International Economics, Elsevier, vol. 93(2), pages 227-238.
    6. Tatsuo Yanagita & Tamotsu Onozaki, 2008. "Dynamics of a market with heterogeneous learning agents," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 3(1), pages 107-118, June.
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    8. Fagerberg, Jan & Mowery, David C. & Nelson, Richard R. (ed.), 2006. "The Oxford Handbook of Innovation," OUP Catalogue, Oxford University Press, number 9780199286805.
    9. Gershon Feder & Gerald T. O'Mara, 1982. "On Information and Innovation Diffusion: A Bayesian Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(1), pages 145-147.
    10. Elettra Agliardi, 1998. "Positive Feedback Economies," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-37621-2, December.
    11. Francesco Bogliacino & Giorgio Rampa, 2012. "Quality risk aversion, conjectures, and new product diffusion," Journal of Evolutionary Economics, Springer, vol. 22(5), pages 1081-1115, November.
    12. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
    13. Tsur, Yacov & Sternberg, Menachem & Hochman, Eithan, 1990. "Dynamic Modelling of Innovation Process Adoption with Risk Aversion and Learning," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 336-355, April.
    14. Jensen, Richard, 1982. "Adoption and diffusion of an innovation of uncertain profitability," Journal of Economic Theory, Elsevier, vol. 27(1), pages 182-193, June.
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    Cited by:

    1. Soukup, A. & Brčák, J. & Svoboda, R., 2014. "Monopolistic Competition in the International Trade of Agricultural Products," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 6(1), pages 1-11, March.
    2. Giorgio Rampa & Margherita Saraceno, 2018. "Accuracy and Costs of Dispute Resolution with Heterogeneous Consumers. A Conjectural Approach to Mass Litigation," DEM Working Papers Series 155, University of Pavia, Department of Economics and Management.
    3. Francesco Bogliacino & Giorgio Rampa, 2012. "Quality risk aversion, conjectures, and new product diffusion," Journal of Evolutionary Economics, Springer, vol. 22(5), pages 1081-1115, November.
    4. Bogliacino, Francesco & Rampa, Giorgio, 2014. "Expectational bottlenecks and the emerging of new organizational forms," Structural Change and Economic Dynamics, Elsevier, vol. 29(C), pages 28-39.
    5. Giorgio Rampa & Margherita Saraceno, 2023. "Conjectures and underpricing in repeated mass disputes with heterogeneous plaintiffs," Journal of Economics, Springer, vol. 139(1), pages 1-32, June.

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    More about this item

    Keywords

    Product diffusion; Risk aversion; Lock-in; Monopolistic competition; Multiple equilibria;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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