Author: Anirudh S. DhebarPublisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 43
Book Description
Durable-goods Monopolists, Rational Consumers, and Improving Products
Author: Anirudh S. DhebarPublisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 43
Book Description
Durable-goods Monopolists and Rational Consumers
Author: Anirudh S. DhebarPublisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 32
Book Description
Innovation and the Durable Goods Monopolist
Author: Ramesh ShankarPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
When an improvable durable good (such as packaged software) saturates the market, the seller could be tempted to release new versions too frequently, hurting her profit. A novel contractual device, which we term as a Free New Version Rights warranty (Free NVR warranty), can help the seller overcome this temptation. In a two-period game-theoretic model involving a monopolist firm facing heterogeneous consumers, we derive conditions under which a rational monopolist can act suboptimally: she could face a commitment problem and offer the new version, even if doing so lowers her overall profit. Profit is hurt because when consumers expect a new version, (a) fewer consumers buy the initial version, and (b) the monopolist is forced to charge a lower price for the initial version. We show how the free NVR warranty, which requires the monopolist to offer consumers the right to receive the new version for free for a limited period, can solve her commitment problem. This is a new, surprising finding: by bundling new-version rights with the initial version, the monopolist at first appears to be denying herself future revenue. We derive conditions under which this apparently unprofitable action is optimal, which is our main contribution. When free NVR is offered, consumer surplus decreases and social surplus increases. This work extends prior literature on durable goods and the Coase conjecture to innovative durable goods with network externalities. The findings have important practical implications for firms selling new versions of innovative durable goods subject to network effects, as well as for their consumers.
Price and Quality Discrimination in Durable Goods Monopoly with Resale Trading
Author: Praveen KumarPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
We examine a durable goods monopolist's optimal dynamic price and product quality strategy when buyers are rational, have diverse tastes, and can trade used durables among themselves. Our analysis makes four main points. First, in contrast to the well-known time-inconsistency problem of the durable goods monopolist, intertemporal quality discrimination introduces a time-inconsistency problem of not raising prices against the high-valuation consumers who may delay purchase in hope of quality upgrades. Resale trading ameliorates this time-inconsistency problem and allows the monopolist to effectively discriminate, especially when the buyers are patient. Second, the monopolist's optimal price and quality offers in the new good market may have complex dynamic patterns that depend crucially on the discount factor. In particular, for low discount factors, new good prices can fall as product quality improves even in the absence of any entry threats or learning economies. Third, initial quality distortions will be followed by steady-state quality allocations that are always efficient for the high-valuation buyers, and sometimes also for the marginal consumer-types. Finally, both the resale trading frequency and the price discount for secondhand goods is driven by the pace of strategic quality obsolescence in the new good market.
Rational Expectations Equilibria, Product Spectra, and Warranties in a Durable Goods Market
Author: William James CarmodyPublisher:
ISBN:
Category : Durable goods, Consumer
Languages : en
Pages : 262
Book Description
Handbook of Pricing Research in Marketing
Author: Vithala R. RaoPublisher: Edward Elgar Publishing
ISBN: 1848447442
Category : Business & Economics
Languages : en
Pages : 617
Book Description
Pricing is an essential aspect of the marketing mix for brands and products. Further, pricing research in marketing is interdisciplinary, utilizing economic and psychological concepts with special emphasis on measurement and estimation. This unique Handbook provides current knowledge of pricing in a single, authoritative volume and brings together new cutting-edge research by established marketing scholars on a range of topics in the area. The environment in which pricing decisions and transactions are implemented has changed dramatically, mainly due to the advent of the Internet and the practices of advance selling and yield management. Over the years, marketing scholars have incorporated developments in game theory and microeconomics, behavioral decision theory, psychological and social dimensions and newer market mechanisms of auctions in their contributions to pricing research. These chapters, specifically written for this Handbook, cover these various developments and concepts as applied to tackling pricing problems. Academics and doctoral students in marketing and applied economics, as well as pricing-focused business practitioners and consultants, will appreciate the state-of-the-art research herein.
Durable Goods Monopoly with Entry of New Consumers
Author: Joel SobelNew-Product Diffusion Models
Author: Vijay MahajanPublisher: Springer Science & Business Media
ISBN: 9780792377511
Category : Business & Economics
Languages : en
Pages : 376
Book Description
Product sales, especially for new products, are influenced by many factors. These factors are both internal and external to the selling organization, and are both controllable and uncontrollable. Due to the enormous complexity of such factors, it is not surprising that product failure rates are relatively high. Indeed, new product failure rates have variously been reported as between 40 and 90 percent. Despite this multitude of factors, marketing researchers have not been deterred from developing and designing techniques to predict or explain the levels of new product sales over time. The proliferation of the internet, the necessity or developing a road map to plan the launch and exit times of various generations of a product, and the shortening of product life cycles are challenging firms to investigate market penetration, or innovation diffusion, models. These models not only provide information on new product sales over time but also provide insight on the speed with which a new product is being accepted by various buying groups, such as those identified as innovators, early adopters, early majority, late majority, and laggards. New Product Diffusion Models aims to distill, synthesize, and integrate the best thinking that is currently available on the theory and practice of new product diffusion models. This state-of-the-art assessment includes contributions by individuals who have been at the forefront of developing and applying these models in industry. The book's twelve chapters are written by a combined total of thirty-two experts who together represent twenty-five different universities and other organizations in Australia, Europe, Hong Kong, Israel, and the United States. The book will be useful for researchers and students in marketing and technological forecasting, as well as those in other allied disciplines who study relevant aspects of innovation diffusion. Practitioners in high-tech and consumer durable industries should also gain new insights from New Product Diffusion Models. The book is divided into five parts: I. Overview; II. Strategic, Global, and Digital Environments for Diffusion Analysis; III. Diffusion Models; IV. Estimation and V. Applications and Software. The final section includes a PC-based software program developed by Gary L. Lilien and Arvind Rangaswamy (1998) to implement the Bass diffusion model. A case on high-definition television is included to illustrate the various features of the software. A free, 15-day trial access period for the updated software can be downloaded from http://www.mktgeng.com/diffusionbook. Among the book's many highlights are chapters addressing the implications posed by the internet, globalization, and production policies upon diffusion of new products and technologies in the population.
Durable Goods Monopoly with Uninformed Consumers
Author: Joseph Emmett HarringtonPublisher:
ISBN:
Category :
Languages : en
Pages : 34
Book Description
Author: