IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v324y2025i2p538-554.html
   My bibliography  Save this article

Sequential product launches with post-sale updates

Author

Listed:
  • Jalili, Monire
  • Pangburn, Michael S.
  • Stavrulaki, Euthemia
  • Xu, Shubin

Abstract

As technology evolves, a seller may offer sequential releases of its product over time, with new versions offering superior performance. Beyond offering new product releases over time, sellers now increasingly have the option of offering post-sale software updates, thereby potentially extending product longevity. The potential to change product life cycles via software updates is of strategic importance, particularly since past and future product releases are interrelated. Considering stochastic technology evolution and strategic consumers, we study the strategy of augmenting paid product releases with free product updates. By contrasting this strategy against two benchmark product-launch policies without free updates, we show that offering free updates can generate nontrivial profit gains and optimally lengthen the seller’s new-product introduction cycles. We explore the sensitivity of the seller’s optimal release decisions and profit to key drivers, including costs and technology uncertainty. We also investigate the impact of consumer heterogeneity, distinct time-discount rates between the seller and consumers, and allowing multiple updates per product release. Our results show that while free updates ostensibly appear to favor consumers and do deliver utility to customers, they also are an effective mechanism for a seller to increase profits.

Suggested Citation

  • Jalili, Monire & Pangburn, Michael S. & Stavrulaki, Euthemia & Xu, Shubin, 2025. "Sequential product launches with post-sale updates," European Journal of Operational Research, Elsevier, vol. 324(2), pages 538-554.
    • Handle: RePEc:eee:ejores:v:324:y:2025:i:2:p:538-554
    DOI: 10.1016/j.ejor.2025.01.018
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221725000414
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2025.01.018?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:324:y:2025:i:2:p:538-554. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.