A STUDY ON COST DISTRIBUTION WITH LEARNING AND FORGETTING EFFECTS UNDER COMPETITION

摘要

The objective of this study is to find out the optimal cost-distribution rate of a new product in order to minimize the incumbent firm's cost under a monopolistically competitive market. From the incumbent's perspective, during the product life cycle (PLC), the impacts of the competitors' entry and the learning and forgetting effects are taken into account in estimating the incumbent's costs. In this regard, the competitors' entry behaviors in the monopolistically competitive market would be modeled by a non-homogeneous Poisson process (NHPP), and a Bayesian decision model is proposed to determine the optimal cost-distribution rate with the aid of both expert opinions and available information.