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

Abstract

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 also used to forecast the future market of the big-size LCD and PDP.