Empirical Regularities in Distributions of Individual Consumption Expenditure

We empirically investigate distributions of individual consumption expenditure f or four commodity categories conditional on fixed income levels. The data stems from the Family Expenditure Survey carried out annually in the United Kingdom. W e use graphical techniques to test for normality and lognormality of these distributions. While mainstream economic theory does not predict any structure for these distributions, we find that in at least three commodity categories individual consumption expenditure conditional on a fixed income level is lognormally distributed.Comment: 9 pages including figures; for Int. J. Mod. Phys. C 13, No.

A Percolation-Based Model Explaining Delayed Take-Off in New-Product Diffusion

A model of new-product diffusion is proposed in which a site-percolation dynamics represents socially-driven diffusion of knowledge about the product's characteristics in a population of potential buyers. A consumer buys the new product if her valuation of it is not below the price of the product announced by the firm in a given period. Our model attributes the empirical finding of a delayed ``take-off'' of a new product to a drift of the percolation dynamics from a non-percolating regime to a percolating regime. This drift is caused by learning-effects lowering the price of the product, or by network-effects increasing its valuation by consumers, with an increasing number of buyers.new-product diffusion, innovation adoption, spatial stochastic processes, percolation

An Aspiration Adaptation Based Model of the Timing of Product Innovation

This paper applies the theory of aspiration adaptation to industrial economics. It is motivated by the question, frequently raised in the context of theoretical and empirical research on industrial innovation, of what triggers a firm's innovative activity. We develop a model of the management's decision-making relating a firm's competitive behavior, in particular the decision to start the development of a new product generation, to the current and past values of the firm's growth rate and profitability. This linkage offers an alternative perspective on the incentives for innovation. Furthermore, we explore the relationship between firm size and innovativeness resulting from our model

A Percolation-Based Model Explaining Delayed Take-Off in New-Product Diffusion

A model of new-product diffusion is proposed in which a site-percolation dynamics represents socially-driven diffusion of knowledge about the product's characteristics in a population of potential buyers. A consumer buys the new product if her valuation of it is not below the price of the product announced by the firm in a given period. Our model attributes the empirical finding of a delayed ``take-off'' of a new product to a drift of the percolation dynamics from a non-percolating regime to a percolating regime. This drift is caused by learning-effects lowering the price of the product, or by network-effects increasing its valuation by consumers, with an increasing number of buyers

An Aspiration Adaptation Based Model of the Timing of Product Innovation

This paper applies the theory of aspiration adaptation to industrial economics. It is motivated by the question, frequently raised in the context of theoretical and empirical research on industrial innovation, of what triggers a firm's innovative activity. We develop a model of the management's decision-making relating a firm's competitive behavior, in particular the decision to start the development of a new product generation, to the current and past values of the firm's growth rate and profitability. This linkage offers an alternative perspective on the incentives for innovation. Furthermore, we explore the relationship between firm size and innovativeness resulting from our model.Aspiration Adaptation, Bounded Rationality, Product Innovation

Empirical Regularities in Distributions of Individual Consumption Expenditure

We empirically investigate distributions of individual consumption expenditure f or four commodity categories conditional on fixed income levels. The data stems from the Family Expenditure Survey carried out annually in the United Kingdom. W e use graphical techniques to test for normality and lognormality of these distributions. While mainstream economic theory does not predict any structure for these distributions, we find that in at least three commodity categories individual consumption expenditure conditional on a fixed income level is lognormally distributed.