Simultaneous vs. Sequential Product Release

Abstract

We study the profitability of a seller of two products under simultaneous vs. sequential releases. The seller and heterogenous customers have a prior belief of products' popularity before their debut. The sequential release allows customer engagement and learning about the product for an extended period. Customers learn about the attraction from their direct experience (private), reading critics' opinions (public), or reading other customers' reviews (social). Under private learning, the simultaneous release is more profitable than the sequential release for a price-taker seller. However, we show that the result reverses when the seller allows for public and social learning or when the seller can price products intertemporally.

Keywords: buzz economy, social learning, product release

JEL Classification: D83