As a consequence of the importance of technology platforms, it is almost impossible for firms to engage the competitive battle on their own. We therefore see patterns of competition emerge that do not match the economic models of perfect competition or even of oligopolistic or monopolistic competition. Rather, competition takes place between a few large coalitions, or networks, of firms around a common technological platform. Such networks, consisting of multiple firms performing different roles, are not unlike biological ecosystems. For such networks, therefore, the term business ecosystem is increasingly used (Den Hartigh & Van Asseldonk, 2004; Iansiti & Levien, 2002, 2004a, 2004b; Moore, 1993, 1996; Witte, 2004). The term business ecosystem was coined by James Moore in his 1993 Harvard Business Review article Predators and Prey. Moore (1996, p. 15) defines a business ecosystem as “The term circumscribes the microeconomics of intense coevolution coalescing around innovative ideas. Business ecosystems span a variety of industries. The companies within them coevolve capabilities around the innovation and cooperatively and competitively to support new products, satisfy customer needs, and incorporate the next round of innovation.” There is a strong analogy between business ecosystems and biological ecosystems, as implied by the “ecosystems” terminology.
Monopolistic competition and new products: a conjectural equilibrium approach
