RT Journal Article
T1 Loyal customer bases as innovation disincentives for duopolistic firms using strategic signaling and Bayesian analysis
A1 Madjid Tavana, 
A1 Debora Di Caprio, 
A1 Santos Arteaga, Francisco Javier
AB In this paper we model the strategic behavior of firms competing in duopolisticenvironments with a loyal customer base and formalize their decision to delay the introductionof the most technologically developed product available. The proposed model extends andcomplements the partial approaches studied in the economic, management and operationsresearch literatures. The former emphasizes the role of the strategic knowledge spilloversthat may take place among competing firms because of their incentives to introduce technologically superior products while assuming the acceptance of such products by customers asgiven. The second defines its technology acceptance model based on the demand side of theeconomic system without considering the resulting strategic interactions that arise among thefirms. The latter addresses the effect that signals about a new technology have on the information acquisition behavior of decision makers (DMs) but does not consider the capacityof DMs to account for several product characteristics and their interaction when acquiring information. Using a duopolistic innovation game model we illustrate how the existence ofloyal customer bases allows for higher expected payoffs when generating monopolized markets but decreases the incentives of firms to introduce the most technologically developedproduct available. The signaling equilibria of the game are determined by demand-basedfactors and the incentives of customers to acquire information on the existing products inthe market. Among the main implications of our model is also the fact that the availabilityof decision support systems that can be used by DMs through their information acquisitionprocesses would improve the quality of the technology being introduced in the market andincrease the firms’ probability of success.
PB Springer
SN 0254-5330
SN 1572-9338
YR 2016
FD 2016-02-01
LK https://hdl.handle.net/20.500.14352/113944
UL https://hdl.handle.net/20.500.14352/113944
LA eng
NO Tavana, M., Di Caprio, D., & Santos-Arteaga, F. J. (2016). Loyal customer bases as innovation disincentives for duopolistic firms using strategic signaling and Bayesian analysis. Annals of Operations Research, 244(2), 647-676. https://doi.org/10.1007/S10479-016-2114-7
DS Docta Complutense
RD 9 abr 2025