The optimal choice of pre-launch reviewer
We develop a framework in which: (i) a firm can have a new product tested publicly before launch; and (ii) tests vary in toughness, holding expertise fixed.� Price flexibility boosts the strong positive impact on consumer beliefs of passing a tough test and mitigates the strong negative impact of failing a soft test.� As a result, profits are convex in toughness: the firm selects either the toughest or softest test available.� The toughest test is optimal when consumers start with an unfavorable prior and receive sufficiently uninformative private signals (an "innovative" product); the softest test is optimal when signals are sufficiently informative.
(This abstract was borrowed from another version of this item.)
|Date of creation:||01 Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+44) 23 80592537
Fax: (+44) 23 80593858
Web page: http://www.economics.soton.ac.uk/
More information through EDIRC
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.:
- Benjamin Chiao & Josh Lerner & Jean Tirole, 2005.
"The Rules of Standard Setting Organizations: An Empirical Analysis,"
NBER Working Papers
11156, National Bureau of Economic Research, Inc.
- Benjamin Chiao & Josh Lerner & Jean Tirole, 2007. "The rules of standard-setting organizations: an empirical analysis," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 905-930, December.
- Chiao, Benjamin & Lerner, Josh & Tirole, Jean, 2006. "The Rules of Standard Setting Organizations: an Empirical Analysis," IDEI Working Papers 388, Institut d'Économie Industrielle (IDEI), Toulouse.
- Chiao, Benjamin & Lerner, Josh & Tirole, Jean, 2007. "The Rules of Standard Setting Organizations: An Empirical Analysis," CEPR Discussion Papers 6141, C.E.P.R. Discussion Papers.
- Bergemann, Dirk & Pesendorfer, Martin, 2001.
"Information Structures in Optimal Auctions,"
CEPR Discussion Papers
2991, C.E.P.R. Discussion Papers.
- Justin P. Johnson & David P. Myatt, 2006.
"On the Simple Economics of Advertising, Marketing, and Product Design,"
American Economic Review,
American Economic Association, vol. 96(3), pages 756-784, June.
- David P. Myatt & Justin P. Johnson, 2004. "On the Simple Economics of Advertising, Marketing, and Product Design," Economics Series Working Papers 185, University of Oxford, Department of Economics.
- Bose, Subir & Orosel, Gerhard O & Ottaviani, Marco & Vesterlund, Lise, 2005.
"Dynamic Monopoly Pricing and Herding,"
CEPR Discussion Papers
5003, C.E.P.R. Discussion Papers.
- Strausz, Roland, 2004.
"Honest Certification and the Threat of Capture,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
25, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Steven Callander & Johannes Horner, 2005.
"The Wisdom of the Minority,"
2005 Meeting Papers
683, Society for Economic Dynamics.
- Paul R. Milgrom, 1979.
"Good Nevs and Bad News: Representation Theorems and Applications,"
407R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
- Mailath George J. & Okuno-Fujiwara Masahiro & Postlewaite Andrew, 1993. "Belief-Based Refinements in Signalling Games," Journal of Economic Theory, Elsevier, vol. 60(2), pages 241-276, August.
- Marco Ottaviani, 2000.
"The Value of Public Information in Monopoly,"
Econometric Society World Congress 2000 Contributed Papers
1479, Econometric Society.
- Gill, David & Sgroi, Daniel, 2008.
"Sequential decisions with tests,"
Games and Economic Behavior,
Elsevier, vol. 63(2), pages 663-678, July.
- Hvide Hans K., 2009. "Oligopolistic Certification," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-21, March.
- Nicola Persico, 1997.
"Information Acquisition in Auctions,"
UCLA Economics Working Papers
762, UCLA Department of Economics.
- Caminal, Ramon & Vives, Xavier, 1997.
"Price Dynamics and Consumer Learning,"
CEPR Discussion Papers
1744, C.E.P.R. Discussion Papers.
- Sgroi, D., 2000.
"Optimizing Information in the Herd: Guinea Pigs, Profit and Welfare,"
2000-w14, Economics Group, Nuffield College, University of Oxford.
- Sgroi, Daniel, 2002. "Optimizing Information in the Herd: Guinea Pigs, Profits, and Welfare," Games and Economic Behavior, Elsevier, vol. 39(1), pages 137-166, April.
- Raaj Kumar Sah & Joseph E. Stiglitz, 1984.
"The Architecture of Economic Systems: Hierarchies and Polyarchies,"
NBER Working Papers
1334, National Bureau of Economic Research, Inc.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1986. "The Architecture of Economic Systems: Hierarchies and Polyarchies," American Economic Review, American Economic Association, vol. 76(4), pages 716-27, September.
- Smith, L. & Sorensen, P., 1996.
"Pathological Outcomes of Observational Learning,"
115, Economics Group, Nuffield College, University of Oxford.
- Welch, Ivo, 1992. " Sequential Sales, Learning, and Cascades," Journal of Finance, American Finance Association, vol. 47(2), pages 695-732, June.
- Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
- Subir Bose & Gerhard Orosel & Marco Ottaviani & Lise Vesterlund, 2008. "Monopoly pricing in the binary herding model," Economic Theory, Springer, vol. 37(2), pages 203-241, November.
- Josh Lerner & Jean Tirole, 2006. "A Model of Forum Shopping," American Economic Review, American Economic Association, vol. 96(4), pages 1091-1113, September.
- Ramon Caminal & Xavier Vives, 1996. "Why Market Shares Matter: An Information-Based Theory," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 221-239, Summer.
- Lewis, Tracy R & Sappington, David E M, 1994. "Supplying Information to Facilitate Price Discrimination," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 309-27, May.
- Taylor, Curtis R, 1999. "Time-on-the-Market as a Sign of Quality," Review of Economic Studies, Wiley Blackwell, vol. 66(3), pages 555-78, July.
- Kwiek, Maksymilian, 2010. "Competition among mass media," Discussion Paper Series In Economics And Econometrics 1013, Economics Division, School of Social Sciences, University of Southampton.
- Demange, Gabrielle, 2010. "Sharing information in Web communities," Games and Economic Behavior, Elsevier, vol. 68(2), pages 580-601, March.
- Emmanuel Farhi & Josh Lerner & Jean Tirole, 2005. "Certifying New Technologies," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 734-744, 04/05.
- Mezzetti, Claudio & Tsoulouhas, Theofanis, 2000. "Gathering information before signing a contract with a privately informed principal," International Journal of Industrial Organization, Elsevier, vol. 18(4), pages 667-689, May.
When requesting a correction, please mention this item's handle: RePEc:stn:sotoec:1017. 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: (Chris Thorn)The email address of this maintainer does not seem to be valid anymore. Please ask Chris Thorn to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.