In many product categories, technological evolution results in the emergence of a single product design that achieves market dominance. In this article, the authors examine two questions: Will a dominant design emerge in a new product category? and If it does, how long will it be before a dominant design emerges? Thus, the authors simultaneously model the probability of emergence of a dominant design and the time of that emergence, conditional on its emergence. The model incorporates the effects of several product-market characteristics on the probability and time of dominant design emergence, including appropriability of the rents associated with the product, network effects, size of the product's value net, the standards-setting process, radicalness of innovation, and research-and-development intensity. The authors use data for 63 office products and consumer durables to estimate a split-population hazard model for the probability and time of emergence of the dominant design. They find that a dominant design is more likely to emerge with weak appropriability, weak network effects, low product radicalness, and high research-and-development intensity. Dominant designs that emerge are likely to emerge sooner in product categories in which there is weak appropriability, there are a large number of firms in the value net, the standards are set by a de facto process, and there is low product radicalness The proposed model can be used to predict both the probability and the time of the emergence of a dominant design in a new product category.
All Science Journal Classification (ASJC) codes
- Business and International Management