When giving some away makes sense to jump-start the diffusion process
This paper uses an analytical model to examine when it makes sense to provide incentives to innovators to adopt a new product. The model allows for separate segments of innovators and imitators, each of which follows a Bass-type diffusion process. Interestingly “seeding” the market is optimal for a limited range of situations and these do not appear to include those where there is a downturn in sales (chasm) as sales move from the first to the second segment. Copyright Springer Science + Business Media, LLC 2006
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baohong Sun & Jinhong Xie & H. Henry Cao, 2004. "Product Strategy for Innovators in Markets with Network Effects," Marketing Science, INFORMS, vol. 23(2), pages 243-254, October.
- Nair, Harikesh S. & Chintagunta, Pradeep & Dube, Jean-Pierre, 2003.
"Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants,"
1948, Stanford University, Graduate School of Business.
- Harikesh Nair & Pradeep Chintagunta & Jean-Pierre Dubé, 2004. "Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants," Quantitative Marketing and Economics, Springer, vol. 2(1), pages 23-58, 03.
- Joseph Farrell & Garth Saloner, 1984.
"Standardization, Compatibility and Innovation,"
345, Massachusetts Institute of Technology (MIT), Department of Economics.
- Sachin Gupta & Dipak C. Jain & Mohanbir S. Sawhney, 1999. "Modeling the Evolution of Markets with Indirect Network Externalities: An Application to Digital Television," Marketing Science, INFORMS, vol. 18(3), pages 396-416.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
- Albert C. Bemmaor & Janghyuk Lee, 2002. "The Impact of Heterogeneity and Ill-Conditioning on Diffusion Model Parameter Estimates," Marketing Science, INFORMS, vol. 21(2), pages 209-220, November.
- Hubert Gatignon & Jehoshua Eliashberg & Thomas S. Robertson, 1989. "Modeling Multinational Diffusion Patterns: An Efficient Methodology," Marketing Science, INFORMS, vol. 8(3), pages 231-247.
- Shlomo Kalish & Gary L. Lilien, 1983. "Optimal Price Subsidy Policy for Accelerating the Diffusion Of Innovation," Marketing Science, INFORMS, vol. 2(4), pages 407-420.
- John Hauser & Gerard J. Tellis & Abbie Griffin, 2006. "Research on Innovation: A Review and Agenda for," Marketing Science, INFORMS, vol. 25(6), pages 687-717, 11-12.
- John A. Norton & Frank M. Bass, 1987. "A Diffusion Theory Model of Adoption and Substitution for Successive Generations of High-Technology Products," Management Science, INFORMS, vol. 33(9), pages 1069-1086, September.
When requesting a correction, please mention this item's handle: RePEc:kap:mktlet:v:17:y:2006:i:4:p:243-254. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.