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Learning by Doing and the Demand for Advanced Products

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  • Yufeng Huang

    (Simon Business School, University of Rochester, Rochester, New York 14627)

Abstract

How much does consumer learning by doing affect the demand for advanced products? In the context of digital cameras, I use detailed picture-level data to directly measure changes in picture quality as a result of learning by doing or product switching. Although learning by doing builds up consumer human capital, a fraction of this human capital is product specific, creating consumer switching costs. To quantify the role of consumer human capital, I structurally estimate the demand for digital cameras with consumer learning by doing. The evolution of consumer human capital explains 23% of the sales of advanced digital cameras, whereas brand-specific human capital—arising from incompatibility in product design—explains 15% of consumer brand-choice inertia.

Suggested Citation

  • Yufeng Huang, 2019. "Learning by Doing and the Demand for Advanced Products," Marketing Science, INFORMS, vol. 38(1), pages 107-128, January.
    • Handle: RePEc:inm:ormksc:v:38:y:2019:i:1:p:107-128
    DOI: 10.1287/mksc.2018.1118
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