• 「ISPL」 Kim, W., & Kim, M. (2014). “Reference Quality-Based Competitive Market Structure for Innovation Driven Markets”. Available at SSRN 2519039.

    Lab: Innovation Strategy & Policy

    Professor: Wonjoon Kim

    Title: Reference Quality-based Competitive Market Structure for Innovation Driven Markets

    Authors: Wonjoon Kim, Minki Kim

    Journal: International Journal of Research in Marketing

    Publish: 2015


    Innovation-driven durable goods markets see substantial changes in quality and available choice sets and subsequent changes of the reference quality in the market over time. Considering the multi-attribute characteristics of these goods, it is important for businesses to identify attributespecific competitive landscapes and develop competitive innovation strategies at the product attribute level. Therefore, this paper proposes a reference-dependent choice model for product quality at the product attribute level that can capture the asymmetric effect of innovation shocks on product demand, i.e., the innovation elasticity of demand, as well as the competitive market structure in product innovation. Moreover, we confirm that there is a certain quality span for a product attribute where the values of products depreciate most significantly due to innovation shocks, which we refer to as the innovation shadow zone. We demonstrate the effectiveness of the proposed approach in developing attribute-specific product innovation strategies using U.S. mobile telephone market data.


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