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2019 | OriginalPaper | Chapter

14. Creative Destructors

Author : Li Way Lee

Published in: Industrial Organization

Publisher: Springer International Publishing

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Abstract

Creative destructors are firms that create new taste, new products, new technologies, and new organizations; meanwhile, they destroy old taste, old products, old technologies, and old organizations. (The popular name for them today is “disruptors.”) In this chapter I ask how creative destructors change market shape, market size, and dominance. I build a simple model of “the perennial gale of creative destruction.” The model shows that creative destruction can promote welfare at a point in time as well as over time. That is to say, static efficiency and dynamic efficiency are compatible: there is no tradeoff between them. No apologies are necessary by anyone.

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Appendix
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Literature
go back to reference Scherer, Frederic M. 1980. Industrial Market Structure and Economic Performance. 2nd ed. Boston, MA: Houghton Mifflin. Scherer, Frederic M. 1980. Industrial Market Structure and Economic Performance. 2nd ed. Boston, MA: Houghton Mifflin.
go back to reference Schumpeter, Joseph A. 1934. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. (Reprinted by Oxford University Press, 1961). Schumpeter, Joseph A. 1934. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. (Reprinted by Oxford University Press, 1961).
go back to reference ———. 1939. Business Cycles. New York, NY: McGraw-Hill. ———. 1939. Business Cycles. New York, NY: McGraw-Hill.
go back to reference ———. 1950. Capitalism, Socialism and Democracy. 3rd ed. New York: Harper & Row. ———. 1950. Capitalism, Socialism and Democracy. 3rd ed. New York: Harper & Row.
Metadata
Title
Creative Destructors
Author
Li Way Lee
Copyright Year
2019
DOI
https://doi.org/10.1007/978-3-030-26237-2_14