Collaborative Product and Market Development: Theoretical Implications and Experimental Evidence
- 1 August 2005
- journal article
- Published by Institute for Operations Research and the Management Sciences (INFORMS) in Marketing Science
- Vol. 24 (3), 396-414
- https://doi.org/10.1287/mksc.1040.0105
Abstract
In alliances jointly developing product and market, we first investigate how (a) the number of networks competing to develop a product, (b) the number of alternative technology platforms, and (c) market sensitivity to product development expenditures affect investments of partnering firms. We find that, in equilibrium, when the number of either competing networks or technologies increases, investments are more likely to be directed toward market, rather than product, development. Second, we consider the case in which firms continue to jointly develop a product but compete individually in the market. Our analysis suggests that forcing alliance partners to compete individually might not attenuate the underinvestment problem associated with new product alliances. Third, we extend the model to consider sequential market entry with rewards based on the order of entry, technology spillover, endogenous market size, and asymmetric technologies. Finally, key predictions of the basic model are tested in two experiments. The aggregate results provide strong support to the qualitative implications of the equilibrium solution but only mixed support to its quantitative predictions.Keywords
This publication has 40 references indexed in Scilit:
- EditorialCreativity and Innovation Management, 2002
- Auctionin Entry into TournamentsJournal of Political Economy, 1999
- An experimental examination of rational rent-seekingEuropean Journal of Political Economy, 1998
- Too Little, Too Early: Introduction Timing and New Product Performance in the Personal Digital Assistant IndustryJournal of Marketing Research, 1997
- Contest success functionsEconomic Theory, 1996
- ORGANIZING SUCCESSFUL CO-MARKETING ALLIANCESJournal of Marketing, 1993
- Competing Research Joint VenturesJournal of Economics & Management Strategy, 1993
- Sources of Market Pioneer Advantages in Consumer Goods IndustriesJournal of Marketing Research, 1985
- Market Structure and InnovationThe Quarterly Journal of Economics, 1979
- Issues in Assessing the Contribution of Research and Development to Productivity GrowthThe Bell Journal of Economics, 1979