Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/118689
Authors: 
Kaldasch, Joachim
Year of Publication: 
15-Sep-2015
Citation: 
[Journal:] British Journal of Economics, Management & Trade [Volume:] 10 [Issue:] 3 [Pages:] 1-15
Abstract: 
A dynamic microeconomic model is presented that establishes the price and unit sales evolution of heterogeneous goods consisting of successive homogenous product generations. It suggests that for a fast growing supply the mean price of the generations are governed by a logistic decline towards a floor price. It is shown that generations of a heterogeneous good are in mutual competition. Their market shares are therefore governed by a Fisher-Pry law while the total unit sales are governed by the lifecycle dynamics of the good. As a result the absolute unit sales of a generation exhibit a characteristic sales peak consisting of a rapid increase followed by a long tail. The presented approach shows that the evolution of successive product generations can be understood as an evolutionary adaptation process. The applicability of the model is confirmed by a comparison with empirical investigations on successive DRAM generations.
Subjects: 
Product diffusion
multiple generations
evolutionary economics
competition
price evolution
DRAM market
JEL: 
C0
C1
D0
D11
L11
Persistent Identifier of the first edition: 
URL of the first edition: 
Additional Information: 
Article no. BJEMT.20473
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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