Business Models and the New Industrial Organization

Abstract

This paper reviews the literature on business models under the contributions of the economic analysis of markets that builds upon the behaviour of individual firms and the properties of equilibrium solutions (New Industrial Organization). First we call the attention into the dynamics of competition that determines the business model as the equilibrium solution when firms compete with short, medium and long term variables. Second we show the restrictive conditions under which “value creation and appropriation”, as the criteria to link choices and consequences in a business model, would lead to the same model as choices based on profit maximization.