Three essays on competitive dynamics and imitation

Abstract

This dissertation includes the research I conducted in the fields of competitive dynamics, imitation and experimental economics. It is composed of three essays. The first essay deals with the performance implications of imitation of competitors’ innovation. In this study we attempted to shed more light on the crucial role of timing when firms imitate a new product technology. On the baseline hypothesis that speed of new technology imitation is positively associated with performance we have explained how contingency factors at the technology pioneer- and environmental-level might vary this relationship. The second essay sheds light on the Red Queen effect as a contest of imitative strategies among rivals. Across the study we show that, in these dynamics, imitation is a compulsory strategy, but only if rapid it allows firms to sustain their performance. We further show that this Red Queen effect depends on product technology heterogeneity in the market, a situation in which products in the market widely differ in terms of the technologies they are equipped with. These two essays have been tested with data on handset technologies introduced in the UK market from 1997 to 2008. This setting is particularly suitable for testing the proposed hypotheses because our time window is characterized by massive changes in technologies, demand, and competitive intensity. The third essay is an experimental work that deals with the issue of coordination. When firms have to transfer knowledge, within or between firms, they have to deal with intense processes of negotiation. Across the study we decided to observe linguistic interaction to provide some evidence on how is structured a process of negotiation through which individuals redefine meanings to coordinate with their peers.