Riding successive product diffusion waves :building a tsunami via upgrade-rebate programs
AbstractWe discuss how trade-in rebates can be used to manage product multigenerational innovation diffusion waves, and study the optimal behavior of the firm controlling the prices and rebates associated to product upgrades. We show how this strategy accelerates the diffusion and can lead to profit increments of about 5%. The strategy is profitable even when the rebate subsidizes the upgrades entirely.
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Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number wb114011.
Date of creation: Nov 2011
Date of revision:
New product diffusion; Successive generations; Trade-in; Upgrades; Optimal strategies;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
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