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When less is more? The contingent effect of product supply limitation in the release of new electronic products

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  • Li, Hui
  • Xu, Yunjie
  • Huang, Lihua

Abstract

In the market of consumer electronics, firms often limit their product supply to create a scarcity effect to entice consumers to buy their product. However, the outcome of such a strategy is not always desirable. In this study, we propose the product configuration level as a contingent variable that works with the supply level to affect the outcome of a supply limitation strategy. With a vignette-based experiment, we find that for a product with a superior configuration, consumers' purchase intention is boosted only if the supply is very limited. For a product with an inferior configuration, however, the supply limitation strategy does not work at any supply level. Therefore, the supply limitation strategy works only for a superior product configuration and at a fine-tuned supply level.

Suggested Citation

  • Li, Hui & Xu, Yunjie & Huang, Lihua, 2021. "When less is more? The contingent effect of product supply limitation in the release of new electronic products," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:joreco:v:60:y:2021:i:c:s0969698920314405
    DOI: 10.1016/j.jretconser.2020.102433
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    Cited by:

    1. Park, Jihye & Li, Wenhan, 2023. "“I got it FIRST†: Antecedents of competitive consumption of a new product," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).

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