Firms and the Creation of New Markets

Erin Anderson and Hubert Gatignon ()
Additional contact information
Erin Anderson: INSEAD
Hubert Gatignon: INSEAD

Chapter 22 in Handbook of New Institutional Economics, 2025, pp 535-564 from Springer

Abstract: Abstract Markets are created by firms, who make decisions about the innovation process and the marketing of innovations. New Institutional Economics, particularly Transaction Cost Economics, is well placed to explain the decisions firms make in highly uncertain and risky businesses, where most innovations fail. Decision-makers’ capacity to follow a conscious economic logic to the fullest is considerably strained by factors such as bounded rationality, information impactedness, and the tacit nature of knowledge. Therefore, opportunities for self-interest seeking with guile abound (e.g., by suppliers or business partners), and contracts are insufficient to protect firm-specific assets. We present the issues arising in the process of generating innovations and then adopt the demand perspective to introduce the problems managers face in creating new markets. We show that the creation of new markets by firms, both when developing and commercializing innovation, is best understood through the lens of New Institutional Economics.

Keywords: Innovation; Marketing; Partnership; Diffusion process; Foreign entry (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

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:spr:sprchp:978-3-031-50810-3_22

Ordering information: This item can be ordered from
http://www.springer.com/9783031508103

DOI: 10.1007/978-3-031-50810-3_22

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().