publication . Article . 1992

The Dynamic Pricing of Next Generation Consumer Durables

Barry L. Bayus;
Open Access
  • Published: 01 Jan 1992 Journal: Marketing Science, volume 11, issue 3, pages 251-265
Abstract
Learning curve effects, aspects of consumer demand models (e.g., reservation price distributions, intertemporal utility maximizing behavior), and competitive activity are reasons which have been offered to explain why prices of new durables decline over time. This paper presents an alternative rationale based on the buying behavior for products with overlapping replacement cycles (i.e., next generation products). A model for consumer sales of a new durable is developed by incorporating the replacement behavior of a previous generation product. Pricing strategies for two product generations are investigated analytically and with numerical methods. Results indicat...
Subjects
free text keywords: installed base, replacement behavior, technology substitution, Marketing, Business and International Management, Economics, Reservation price, Pricing strategies, Dynamic pricing, Installed base, Microeconomics
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publication . Article . 1992

The Dynamic Pricing of Next Generation Consumer Durables

Barry L. Bayus;