References (26)



Market Diffusion with Consumer-Based Bilateral Learning

Hiroshi Kitamura

Kyoto Sangyo University

Akira Miyaoka

Kansai University

September 5, 2011

Studies in Applied Economics, Vol. 5, pp 1-20, December 2011

This paper analyzes the market diffusion of a new product whose quality is uncertain. Consumers learn the product quality by observing the history of market outcomes. Firms cannot observe how consumers evaluate the product quality; instead, they learn by observing consumer behavior. New entry occurs gradually because of informational externalities. This dual uncertainty contributes to an S-shaped diffusion of the new product with declining prices.

Number of Pages in PDF File: 26

Keywords: Experience Goods, Quality Uncertainty, Bilateral Learning, S-shaped Diffusion

JEL Classification: D11, L11, L14

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Date posted: May 13, 2009 ; Last revised: February 4, 2013

Suggested Citation

Kitamura, Hiroshi and Miyaoka, Akira, Market Diffusion with Consumer-Based Bilateral Learning (September 5, 2011). Studies in Applied Economics, Vol. 5, pp 1-20, December 2011. Available at SSRN: https://ssrn.com/abstract=1403793

Contact Information

Hiroshi Kitamura (Contact Author)
Kyoto Sangyo University ( email )
Motoyama, Kamigamo, Kita-Ku
Kyoto, Kyoto 603-8555
HOME PAGE: http://www.geocities.jp/hiro4kitamura/index.html
Akira Miyaoka
Kansai University ( email )
3-3-35 Yamatecho
Suita, Osaka, 564-8680
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References:  26