New and better products attract more consumers and yield higher profits. However, developing better products usually takes longer, allowing other products to appear and take away a market share. Moreover, the product development process involves uncertainty about the time, cost and quality of the end product. Innovators must take this uncertainty and tradeoffs into account in determining their product development strategies. We model innovation competition as a stochastic game, study its equilibrium, and characterize socially optimal innovation.
Track: Product Design and Development
Published in: 5th European International Conference on Industrial Engineering and Operations Management, Rome, Italy
Publisher: IEOM Society International
Date of Conference: July 26
-28
, 2022
ISBN: 978-1-7923-9161-3
ISSN/E-ISSN: 2169-8767