ABSTRACT. The S-shaped innovation adoption curve described by the Bass (1969) model is applied to earnings of firms which introduce new innovative products. These earnings streams often grow slowly, then accelerate rapidly, and finally, plateau at a constant rate so that the Bass model is useful in describing them. Examples of firms whose earnings can be fitted to this S-shaped pattern during new product introductions are identified. Estimating future earnings using the Bass model may assist founding entrepreneurs and other early stage investors in estimating the future value of their investments and in timing their exit strategies. pp. 21-44

Jon D. Pratt
Louisiana Tech University

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