The experience curve and the market size of competitive consumer durable markets
An evolutionary model of the product life cycle is applied to derive the experience curve and the market size of (expensive) durable goods. The experience (learning) curve suggests that the real costs per unit decrease with an increasing cumulative output (Henderson's law). Based on the idea that in a competitive market firms are forced to pass cost advantages on to the price, the evolutionary model suggests that the mean price and also the mean costs are governed by an exponential decline with time. Simultaneously the mean price evolution satisfies Henderson's law. The market size is defined here by the number of active firms. The market size is shown to follow the total market revenue if the latter exhibits fast variations, else the size is nearly constant. A comparison with an empirical investigation confirms the model predictions.
|Date of creation:||14 Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Victor M. Yakovenko & J. Barkley Rosser, 2009. "Colloquium: Statistical mechanics of money, wealth, and income," Papers 0905.1518, arXiv.org, revised Dec 2009.
- Zhu Wang, 2008. "Income Distribution, Market Size and the Evolution of Industry," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(3), pages 542-565, July.
- Kaldasch, Joachim, 2015.
"The Product Life Cycle of Durable Goods,"
EconStor Open Access Articles,
ZBW - German National Library of Economics, pages 1-17.
- Kaldasch, Joachim, 2011. "The Product Life Cycle of Durable Goods," EconStor Preprints 50530, ZBW - German National Library of Economics.
- Joachim Kaldasch, 2011. "The Product Life Cycle of Durable Goods," Papers 1109.0828, arXiv.org, revised Sep 2015.
- Kaldasch, Joachim, 2011. "The product life cycle of durable goods," MPRA Paper 33174, University Library of Munich, Germany.
- Joachim Kaldasch, 2013.
"Evolutionary Model of a Anonymous Consumer Durable Market,"
- 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.
- Patrik Söderholm & Ger Klaassen, 2007. "Wind Power in Europe: A Simultaneous Innovation–Diffusion Model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(2), pages 163-190, February.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:33370. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.