Managing Dynamic Competition

Managing Dynamic Competition

In many important high-technology markets, including software development, data processing, communications, aeronautics, and defense, suppliers learn through experience how to provide better service at lower cost. This paper examines how a buyer designs dynamic competition among rival suppliers to exploit learning economies while minimizing the costs of becoming locked in to one producer. Strat...

Dynamic Competition with Consumer Inertia Dynamic Competition with Consumer Inertia

We study a framework where two duopolists compete repeatedly in prices and where chosen prices potentially affect future market shares, but certainly do not affect current sales. This assumption of consumer inertia causes (noncooperative) coordination on high prices only to be possible as an equilibrium for low values of the discount factor. In particular, high discount factors increase opportu...

Analytical Competition for Managing Customer Relations

Managing competition in the medical profession.

The medical profession always has been viewed as more than a business. Patients often view their physician as a counselor or friend, in whom they entrust their health and to whom they often reveal the most private matters. As with other relationships involving trust (e.g., attorney-client and priest-penitent), the law even recognizes a special privilege for communications between doctors and pa...

Managing Dynamic Procurements

This chapter examines the optimal strategies in repeated procurement settings by large power buyers when there are costs to switching suppliers. It is found that buyers can use switching costs to their advantage. When switching costs are high, a buyer may credibly threaten to replace the incumbent supplier with the rivals. The policy implications of this finding for adoption of technology and f...