Crowdvoting the Timing of New Product Introduction

46 Pages Posted: 27 Jan 2016

See all articles by Victor F. Araman

Victor F. Araman

American University of Beirut - The Olayan School of Business

Rene Caldentey

University of Chicago - Booth School of Business

Date Written: January 27, 2016

Abstract

Launching new products into the marketplace is a complex and risky endeavor that companies must continuously undertake. As a result, it is not uncommon to witness major rms discontinuing a product shortly after its introduction. In this paper, we consider a seller who has the ability to first test the market and gather demand information before deciding whether or not to launch a new product. In particular, we consider the case in which the seller sets up an online voting system that potential customers can use to provide feedback about their willingness to buy the new product. This voting system has the potential of offering a win-win situation whereby a consumer who votes hopes to influence the seller's final assortment, while at the same time these votes and their pace benefit the seller as they provide valuable information to better forecast demand. We investigate the optimal design of such a crowdvoting system and its implications on the seller's commercialization strategy.

Suggested Citation

Araman, Victor F. and Caldentey, Rene, Crowdvoting the Timing of New Product Introduction (January 27, 2016). Available at SSRN: https://ssrn.com/abstract=2723515 or http://dx.doi.org/10.2139/ssrn.2723515

Victor F. Araman

American University of Beirut - The Olayan School of Business ( email )

Beirut, 0236
Lebanon

Rene Caldentey (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://www.chicagobooth.edu/faculty/directory/c/rene-caldentey

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