| This research program asks, in three related parts, how management and marketing of innovations influences (1) consumer choice, (2) firm profitability, and (3) society at large. First, on the demand side, we investigate how exposure to firms? new product strategies and past consumption affect long-term preferences for brands. We then assess the implications for firm strategies and the importance of first-mover advantage. We hypothesize that consumer preferences are endogenous. In particular, we posit that consumers develop preferences for products they were exposed to when they were young. Second, on the supply side, we seek to understand the structure and performance of new product markets from the perspective that innovation involves significant investments in development and commercialization that are often born as fixed costs. We expect that fixed costs limit the number of entrants and create selection effects on the products that are launched. Third, endogenous preferences and limited entry allow that different consumer preferences and products emerge as a function of alternative firm strategies (e.g., different entry sequences), holding initial firm endowments constant. In this context, we propose to treat management and marketing, i.e., practices such as market-research, innovation-acceleration, etc., as technologies that help firms ?see the future first,? select the best product ideas, and select the most favorable equilibrium through entry-timing. We then study how this technology is important to firms and to society. The policy applications of this research program focus on new product stimulus programs, on developing tools for innovation-acceleration, and on the benefits and costs of new product demand stimulation by firms. |
