Question 1

Which of the following statements is true of learning effects?

Accepted Answer

Learning effects refer to the improvement in performance that results from repetition and experience. This improvement in performance can vary greatly across organizations, meaning that there are substantial differences in the rates at which organizations learn.

Option B is incorrect because organizational factors such as firm strategy can have a significant impact on the learning rate, as they can affect the quantity and quality of learning opportunities.

Option C is incorrect because further development and refining of a technology can actually lead to increased learning effects, as it allows organizations to better understand and optimize their use of the technology.

Option D is incorrect because the cost of producing a unit actually decreases as the number of units produced increases due to economies of scale.

Question 2

The more a technology is adopted:

Accepted Answer

As a technology is adopted more widely, there are greater opportunities for the development of complementary assets, such as new applications and features that enhance the value of the technology. Therefore, the more a technology is adopted, the greater the potential for further innovation and improvement.

Question 3

When an industry has network externalities,the value of a good to a user is more likely to go up linearly rather than increase in an s-shape.

Accepted Answer

In industries with network externalities, the value of a good to a user typically increases at an increasing rate as more people use the good, often resulting in an S-shaped curve rather than a linear increase. This is because each new user adds value to the network for all existing users, leading to exponential growth in value as the user base grows.

Question 4

Increasing returns to adoption means that the more a technology is adopted,the more valuable it becomes.

Accepted Answer

Increasing returns to adoption refers to the phenomenon where the value and benefits of a technology increase as more people adopt and use it. This is because there are network effects, learning effects, and economies of scale that come into play when a technology becomes more widespread. As more people use the technology, there are more opportunities for interaction and collaboration, which creates more value for everyone involved. Additionally, as more people use the technology, there is more feedback and data generated, which can lead to improvements and enhancements that make the technology even more valuable.

Question 5

A legally induced adherence to a dominant design is not possible.

Accepted Answer

Legally induced adherence to a dominant design can occur through mechanisms such as patents, which grant the patent holder exclusive rights to a design, thereby legally enforcing adherence to that design by others in the market.

Question 6

Products that have a large installed base are likely to attract more developers of complementary goods.

Accepted Answer

A large installed base means that there is a sizable market for complementary goods and services. Developers are more likely to invest their time and resources into creating products that will be in demand among a large user base. Therefore, products that have a large installed base are likely to attract more developers of complementary goods.

Question 7

The learning curve indicates that the more units a company produces of an item,the more each unit will cost.

Accepted Answer

The learning curve actually indicates that as a company produces more units of an item, the cost per unit will decrease. This is because the process becomes more efficient and workers become more skilled at producing the item.

Question 8

In a market characterized by network externalities,the benefit from using a good decreases with an increase in the number of other users of the same good.

Accepted Answer

The statement is incorrect. In a market characterized by network externalities, the benefit of using a good increases with an increase in the number of other users of the same good, as it enhances the value of the product or service. Examples of such markets include social media, telecommunications, and software platforms.

Question 9

Since perceived or expected installed base may drive subsequent adoptions,a large perceived or expected installed base can lead to a large actual installed base.

Accepted Answer

This statement is true. Perceived or expected installed base can influence people's decisions to adopt a product or service. A large perceived or expected installed base signals to potential adopters that a product is popular and widely used, which can increase its appeal and influence subsequent adoptions. As a result, a large perceived or expected installed base can ultimately lead to a large actual installed base.

Question 10

As firms develop complementary technologies to improve the productivity or ease of utilization of the core technology,the technology becomes less attractive to other firms.

Accepted Answer

As firms develop complementary technologies, it generally makes the core technology more attractive to other firms because these developments increase the core technology's utility, productivity, and ease of use, thereby enhancing its overall ecosystem.

Question 11

Network externalities cannot arise in markets that do not have physical networks.

Accepted Answer

Network externalities can arise in markets that do not have physical networks, such as software platforms or social media networks where users can benefit from the presence of other users.

Question 12

Neon Electronics Inc.is an electronics manufacturing company.It has adopted a dominant design for its television audio speakers.Which of the following statements is most likely to be true in this scenario?

Accepted Answer

When a company adopts a dominant design, it can leverage its resources and investments in complementary assets such as manufacturing processes, distribution channels, and marketing strategies. Therefore, Neon Electronics will have increased opportunities to develop complementary assets. A) is unlikely to be true since adopting a dominant design usually reduces the need for R&D investments. B) is not necessarily true as decreasing returns can be mitigated by improving the efficiency of production processes. D) is not mentioned in the scenario and cannot be inferred.

Question 13

The influence of a dominant design can extend beyond its own technology cycle.

Accepted Answer

A dominant design can impact the development and adoption of future technologies, as it establishes a common understanding and expectation of how a technology should function and look. It can also shape industry standards and practices. Therefore, the influence of a dominant design can extend beyond its own technology cycle.

Question 14

Network externality returns refers to the value customers reap as a larger portion of the market adopts the same good.

Accepted Answer

This is the definition of network externality returns, where the value of a product or service increases as more people use it.

Question 15

Firms that develop new technologies ahead of others often try a number of unsuccessful techniques before finding a solution that works well.This experimentation:

Accepted Answer

Experimenting and trying out different techniques may lead to unsuccessful attempts, but it also widens the firm's perspective to find related solutions and alternatives that work well. This can ultimately enhance the firm's ability to develop and refine technologies.

Question 16

Though learning curves are found in a wide range of organizational processes,there are substantial differences in the rates at which organizations learn.

Accepted Answer

This statement is true. Different organizations learn at different rates, even when dealing with similar processes or tasks. Some organizations may have a steeper learning curve and be able to quickly master a new skill or process, while others may take longer to fully understand and implement it.

Question 17

In industries characterized by network externalities,the value of a technological innovation to users will be a function only of its stand-alone benefits and cost.

Accepted Answer

In industries characterized by network externalities, the value of a technological innovation to users will also depend on how many other users adopt it. This means that the benefits of the innovation increase as more people use it, leading to a positive feedback loop. Therefore, the value to users is not a function solely of its stand-alone benefits and costs.

Question 18

The ability of an organization to recognize,assimilate,and utilize new knowledge is referred to as learning trajectory.

Accepted Answer

The ability of an organization to recognize, assimilate, and utilize new knowledge is referred to as "absorptive capacity," not learning trajectory.

Question 19

Technologically superior products do not always win in the market.

Accepted Answer

Consumer preferences, pricing, marketing, and brand loyalty are also important factors that influence the success of a product in the market, irrespective of its technological superiority.

Question 20

Clear Vision Inc.has been the market leader for vision care products such as eyeglasses and lenses.It has also recently developed the use of laser technology to correct eye defects.Due to its prior related experiences,it has been successful in recognizing the value of new information and using it to develop new technologies ahead of others.This phenomenon is called:

Accepted Answer

The phenomenon described is absorptive capacity, which refers to an organization's ability to recognize and utilize external knowledge or information to develop new products or technologies, as Clear Vision Inc. has done.

Quiz 4: Standards Battles and Design Dominance