A Dynamic Competition Simulation for Worldwide Big‐size TV Market Using Lotka‐Volterra Model

Technological innovation is characterized by the substitution of new technologies for full‐fledged ones in the development of new products, processes and techniques. Global TV market is seeing a price down‐spiral for FPD(Flat Panel Display)‐TVs, replacement of CRT by LCD, and consumer’s defection to larger screen. The LCD‐TV market started in Japan from 2003 and took off globally from 2005. LCD panel production is moving toward larger sizes. In the 35″–39″ size market, the price/performance ratio of LCD‐TV is better than that of PDP. The purpose of this paper is to estimate the demand function of worldwide big‐size (35″–39″) TVs including LCD and PDP with an explicit consideration of market competition. The demand function was estimated using Lotka‐Volterra model, a famous competitive diffusion model. The results exhibit a kind of predator‐prey relationship, in which the PDP market was hunted by LCD product. In addition, the coefficients of difference equations of Lotka‐Volterra model in this analysis are...