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How Do Firms Become Different? A Dynamic Model, Matthew Selove
How Do Firms Become Different? A Dynamic Model, Matthew Selove
Business Faculty Articles and Research
This paper presents a dynamic investment game in which firms that are initially identical develop assets that are specialized to different market segments. The model assumes that there are increasing returns to investment in a segment, for example, as a result of word-of-mouth or learning curve effects. I derive three key results: (1) Under certain conditions there is a unique equilibrium in which firms that are only slightly different focus all of their investment in different segments, causing small random differences to expand into large permanent differences. (2) If, on the other hand, sufficiently large random shocks are possible, firms …
The Rise And Fall Of Bread In America, Amanda Benson
The Rise And Fall Of Bread In America, Amanda Benson
Academic Symposium of Undergraduate Scholarship
Over the last century bread has gone through cycles of acceptance and popularity in the United States. The pressure exerted on the American bread market by manufacturers’ advertising campaigns and various dietary trends has caused it to go through periods of acceptance and rejection. Before the industrialization of bread making, consumers held few negative views on bread and perceived it primarily as a form of sustenance. After its industrialization, the battle between the manufacturers and the neighborhood bakeries over consumers began. With manufacturers, such as Wonder Bread, trying to maximize profits and dominate the market, corporate leaders aimed to discourage …