New product launch: herd seeking or herd preventing?

Abstract

A decision maker offers a new product to a number of potential adopters. He does not know the value of the product, but adopters receive some private information about it. We study how the decision maker may influence learning among adopters by manipulating the launch sequence when both the decision maker and adopters 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 adopters' 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.

Bad News Turned Good: Reversal Under Censorship

“…Finally, our paper is resemblant of models of observational learning a la Banerjee [1992], Bikhchandani, Hirshleifer, and Welch [1992], and Smith and Sørensen [2000]. See Smith and Sørensen [2011] for a review of this literature, Eyster and Rabin [2010] and Eyster and Rabin [2014] for versions with naive consumers, and Liu and Schiraldi [2012] and Nikiforov [2015] for examples of how herds may be manipulated by an outside party. The resemblance is that in all these models sequentially arriving consumers learn from those before them.…”

Discursive Communication Strategies for Introducing Innovative Products: The Content, Cohesion, and Coherence of Product Launch Presentations

“…They found that the execution of a lean presentation with effective marketing significantly improves new product performance. In addition, Liu and Schiraldi (2012) found that the sequence of a product launch presentation is important. Such studies have generally focused on corporate strategies, behind-product launch presentations, and related activities, but they have largely neglected the linguistic perspective, which is critical to the analysis of innovation communication.…”

Time Allocation in Entrepreneurial Selling: Impact of Consumer Peer Learning and Incumbent Reaction

“…For example, [31] examines the incumbent firm's intertemporal decision regarding whether to explore a new technology or exploit an established technology in the presence of consumer peer effects. Others have examined the role of consumer peer learning in influencing decisions such as those involving pricing [32,33] and product launch timing [34]. However, it is unclear whether such findings in large firm settings generalize and apply to entrepreneurial selling where there are limited resources.…”