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The effect of feedback consistency on success in markets with positive feedbacks

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  • Lamberson, P.J.
  • Page, Scott E.

Abstract

In this paper, we show how the finite time expected outcomes in a stochastic ball and urn model depend on the variation in feedbacks by applying the concept of second order stochastic dominance to the feedback distribution. We find that less variation leads to greater expected outcomes.

Suggested Citation

  • Lamberson, P.J. & Page, Scott E., 2012. "The effect of feedback consistency on success in markets with positive feedbacks," Economics Letters, Elsevier, vol. 114(3), pages 259-261.
    • Handle: RePEc:eee:ecolet:v:114:y:2012:i:3:p:259-261
    DOI: 10.1016/j.econlet.2011.10.022
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    References listed on IDEAS

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    Cited by:

    1. P.J. Lamberson & Scott E. Page, 2018. "First mover or higher quality? Optimal product strategy in markets with positive feedbacks," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 40-52, March.

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    More about this item

    Keywords

    Urn model; Positive feedbacks; Stochastic dominance;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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