Diffusion and Pricing Over the Product Life Cycle

90 Pages Posted: 7 May 2019

See all articles by Harikesh Nair

Harikesh Nair

Stanford University - Graduate School of Business

Date Written: April 30, 2019

Abstract

This chapter presents a selective review of a literature in marketing that analyzes diffusion and pricing over the product life-cycle. I primarily focus on empirical work, and on papers that deal with the dynamics of pricing over time. I discuss how recent empirical work has linked outcomes to micro-foundations and accommodated a role for forward-looking consumers and firms. I emphasize a more nuanced perspective of the product life-cycle that has emerged in the literature, as an endogenous outcome arising from the interaction of preferences, expectations, costs and competition in the market, rather than as an exogenously specified process against which marketing strategies should be optimized.

Keywords: diffusion, dynamic pricing, durable goods, forward-looking consumers and firms, time consistency, Markov Perfect Equilibrium

JEL Classification: M13, M31, L11, L82

Suggested Citation

Nair, Harikesh, Diffusion and Pricing Over the Product Life Cycle (April 30, 2019). Stanford University Graduate School of Business Research Paper No. 19-24. Available at SSRN: https://ssrn.com/abstract=3380744 or http://dx.doi.org/10.2139/ssrn.3380744

Harikesh Nair (Contact Author)

Stanford University - Graduate School of Business ( email )

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Stanford, CA 94305-5015
United States
650-736-4256 (Phone)

HOME PAGE: http://faculty-gsb.stanford.edu/nair/index.html

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