Title

Technology timing and pricing in the presence of an installed base: A study on the industrial organization of information goods industries

Publication Type

Book

Publication Date

7-2010

Abstract

This study addresses a vendor's strategies to tackle its own installed base when selling a newly improved product. In particular, we investigate the optimal combinations of timing, pricing and product line strategies that the vendor can employ for selling its newly improved product in the presence of an installed base. We characterize the market with either a partly- or fully- covered installed base in terms of consumers' relative willingness to pay for the newly improved version and their relative payoffs from delayed purchase across periods. Different from the conventional proposition of constant consumer reservation price, we propose that if consumers already own an existing (old) version of a durable product, their willingness to purchase the newly improved version indeed increases over time! This effect, interweaving with consumer heterogeneity on valuation of quality and on purchase history may enable perfect intertemporal price discrimination.

Discipline

Computer Sciences | Library and Information Science | Management Information Systems

Research Areas

Information Systems and Management

First Page

1

Last Page

100

ISBN

9783639278736

Publisher

VDM Verlag

City or Country

Saarbrücken, Germany

Additional URL

http://worldcat.org/isbn/9783639278736

This document is currently not available here.

Share

COinS