Market Segmentation and the Sources of Rents From Innovation: Personal Computers in the Late 1980's (Classic Reprint) - Rilegato

Bresnahan, Timothy F.

 
9780483878358: Market Segmentation and the Sources of Rents From Innovation: Personal Computers in the Late 1980's (Classic Reprint)

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Excerpt from Market Segmentation and the Sources of Rents From Innovation: Personal Computers in the Late 1980's

In differentiated, fast changing product markets, innovative firms might be able to take advantage of several different sources of transitory market power. First, new products might incorporate novel features, making existing products only an imperfect substitute for the new good. Second, firms may try to slow down the pace of rent-dissipation in the marketplace by extending the protective umbrella of a pre-existing brand-name reputation over new product introductions. To take advantage of this branding, innovators might exploit a widespread willingness to pay a brand premium; alternatively, the innovator might concentrate on serving high-margin niche markets for the latest offerings from high-quality branded producers (teece.

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