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A platform for research: civil engineering, architecture and urbanism
Competitive Pricing of Innovative Products with Consumers’ Social Learning
Consumers often face valuation uncertainty when innovative products are introduced into market, and they may update the valuation about product quality based on historical sales information over time. Based on this background, this study constructed a two-period duopoly model of innovative products and investigated the effect of consumers’ social learning on enterprises’ pricing strategies and profits. Optimal pricing decisions for competitive enterprises with and without consumers’ social learning were obtained. It was found that consumers’ social learning will intensify competition between enterprises, which will lower their prices and profits. The stronger the learning intensity of consumers, the greater the profit loss for enterprises.
Competitive Pricing of Innovative Products with Consumers’ Social Learning
Consumers often face valuation uncertainty when innovative products are introduced into market, and they may update the valuation about product quality based on historical sales information over time. Based on this background, this study constructed a two-period duopoly model of innovative products and investigated the effect of consumers’ social learning on enterprises’ pricing strategies and profits. Optimal pricing decisions for competitive enterprises with and without consumers’ social learning were obtained. It was found that consumers’ social learning will intensify competition between enterprises, which will lower their prices and profits. The stronger the learning intensity of consumers, the greater the profit loss for enterprises.
Competitive Pricing of Innovative Products with Consumers’ Social Learning
Lu Xiao (author) / Hang Zhang (author) / Yong Qin (author)
2020
Article (Journal)
Electronic Resource
Unknown
Metadata by DOAJ is licensed under CC BY-SA 1.0
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