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THE SURVIVAL OF DIFFERENTIATED PRODUCTS: AN APPLICATION TO THE UK AUTOMOBILE MARKET, 1971–2002*
Author(s) -
REQUENASILVENTE FRANCISCO,
WALKER JAMES T.
Publication year - 2009
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2009.02098.x
Subject(s) - product differentiation , competition (biology) , economics , product (mathematics) , market structure , market competition , product market , product proliferation , automotive industry , industrial organization , new product development , microeconomics , market economy , biology , product management , engineering , ecology , geometry , mathematics , management , cournot competition , incentive , aerospace engineering
We investigate how competition affected the survival of products in the UK automobile market between 1971 and 2002. We find, after using a host of controls to account for product characteristics and changes in market structure, that (i) within and between firm spatial competition significantly reduces the life of a model, (ii) initial product differentiation and variant proliferation obviate competition, and (iii) product innovation significantly extends model survival.