Disruptive Technologies and the Emergence of Competition

Ron Adner () and Peter Zemsky ()
Additional contact information
Ron Adner: INSEAD
Peter Zemsky: INSEAD

RAND Journal of Economics, 2005, vol. 36, issue 2, 229-254

Abstract: We formalize the phenomenon of disruptive technologies that initially serve isolated market niches and, as they mature, alter industry boundaries by displacing established technologies from mainstream segments. Using a model of horizontal and vertical differentiation, we show how the threat of disruption depends on rates of technological advance, how many firms use each technology, relative market segment sizes, and firms' ability to price discriminate. We characterize the effect of disruption on prices, market shares, social welfare, and innovation incentives. We show that the possibility that mergers trigger disruption and thereby alter industry boundaries is important for assessing their impact on social welfare and profits.

Keywords: Market Structure, Firm Strategy, and Market Performance: General Antitrust Policy: General Business Economics: General - market definition; mergers; threat of substitutes (search for similar items in EconPapers)
JEL-codes: L10 L40 M20 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (48)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:36:y:2005:2:p:229-254

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().