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New product launch: herd seeking or herd preventing?

Liu, Ting and Schiraldi, Pasquale (2012) New product launch: herd seeking or herd preventing? Economic Theory, 51 (3). pp. 627-648. ISSN 0938-2259

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Identification Number: 10.1007/s00199-011-0614-x

Abstract

A decision maker offers a new product to a number of potential adopers. He does not know the value of the product, but adopers receive some private information about it. We study how the decision maker may influence learning among adopers by manipulaing the launch sequence when both the decision maker and adopers can learn about the value of the product from previous adoption decisions. The conditions under which the decision maker prefers a sequential launch to a simultaneous launch depend on adopers’ prior beliefs about the value of the product and adoption costs. We derive the decision maker’s optimal launch sequence and study how it endogenizes informational herding.

Item Type: Article
Official URL: http://www.springer.com/economics/economic+theory/...
Additional Information: © 2012 Springer
Subjects: H Social Sciences > HB Economic Theory
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 14 Apr 2011 08:40
Last Modified: 30 May 2014 13:30
URI: http://eprints.lse.ac.uk/id/eprint/35601

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