Timing of information acquisition in a competitive environment

Abstract

This article investigates the impact of timing on sellers' information acquisition strategies in a duopoly setting. Market uncertainty is captured by a representative consumer who has a private taste for the product's horizontal attribute, and both sellers can acquire this information either before (ex-ante acquisition) or after (ex-post acquisition) observing their own product qualities. We identify several conflicting effects of information acquisition that vary significantly in its timing and market characteristics. In the monopoly scenario, information acquisition is unambiguously beneficial and ex-ante acquisition is the dominant option, because it helps a seller not only design the proper product but also craft better pricing strategy. By contrast, when there is competition, information acquisition eliminates the buffer role of market uncertainty and leads to the fiercest production or pricing competition, which makes the subsequent effects of acquisition detrimental, and a seller's payoff is nonmonotonic in terms of its acquisition cost. Moreover, compared with the ex-ante information acquisition, ex-post information acquisition normally generates higher sellers' equilibrium payoffs by postponing the timing of acquisition and maintaining product differentiation. Nonetheless, ex-post information acquisition also provides the seller with greater acquisition incentive and occasionally makes him worse off than that in the ex-ante scenario. Thus, in a competitive environment, having the option of information acquisition and flexibility in its timing can be both detrimental and irresistible.

Green Crowdfunding: An Empirical Study of Success Factors

“…Some studies suggest that crowdfunding could be viewed as a tool for market insights helping gather information about an idea's market potential and that such might directly impact the crowdfunding initiative's success [52,53]. The broader literature on market information and product development presents incongruities regarding the effect of various NPD stages on a product's market success [73,74]. For instance, Guan & Chen [73] suggest that market insights are most important during the ideation stage as in such stage, modification of the products is still possible; companies able to acquire that insights in earlier stages of product development have the greatest success when the product reaches the market.…”

“…The broader literature on market information and product development presents incongruities regarding the effect of various NPD stages on a product's market success [73,74]. For instance, Guan & Chen [73] suggest that market insights are most important during the ideation stage as in such stage, modification of the products is still possible; companies able to acquire that insights in earlier stages of product development have the greatest success when the product reaches the market. Other studies suggest that market insights are more crucial at later phases of product development when making decisions on testing, and a company needs to assess how well-generated prototypes operate in actual use [74,75].…”

Coordinating the retail supply chain with item‐level RFID and excess inventory under a revenue‐cost‐sharing contract

“…Pricing and inventory control are two important problems in supply chain management, and they have been studied extensively from many different perspectives such as customer returns (Chen et al., 2018), branding (Choi, 2018) and retailing (Li et al., 2006). In reality, pricing and inventory can be affected by many business activities such as information acquisition (Guan and Chen, 2016, 2017). Recently, pricing and inventory decisions are also studied with the presence of RFID because they can be affected significantly after RFID is implemented.…”

Sooner or later? A study of report timing

“…More broadly, our study relates to a large literature in production and operations management regarding timing decisions. Many studies in this body of literature focus on the timing of strategic decisions in competitions (Anderson & Yang, 2015; Arya & Mittendorf, 2018; Guan & Chen, 2016; Niu et al., 2019; Ulku et al., 2005). Some studies focus on the timing of vulnerability disclosures in software industries (Sen et al., 2020) and the introduction timing of product‐line extensions (Ke et al., 2013).…”