Product innovation as a static game of incomplete information in a non-Bayesian environment

• Main Author: Wolf, Guy
• Other Authors: Ross, Don
• Format: Dissertation
• Language: English
• Published: University of Cape Town 2014
• Subjects: Economics
• Online Access: http://hdl.handle.net/11427/9870

Includes bibliographical references. === The apparent failure of incumbent firms to produce radical innovations is one that continues to provoke significant debate in the economic literature. This phenomenon, termed the "Incumbent's Curse" by Chandy and Tellis (2000, p.2) receives significant support. Rosenbloom and Christensen (1994, p.655) go as far as to say that this is one of the "stylised facts" in the innovation literature. The concept of incumbent failure to innovate receives support both in theoretic modelling (e.g. Ghemawat 1991, Reinganum, 1983) and in empirical case studies (e.g. Christensen 1993, Henderson and Clark 1990). Chandy and Tellis (2000) rightly point out however that such literature has focused on industries in which there is such incumbent inertia. There are well documented examples of leadership in a high profile industry changing with new product innovations, e.g. typewriters, computer disks.