The optimal software licensing policy under quality uncertainty
ICEC '03 Proceedings of the 5th international conference on Electronic commerce
Introduction of New Technologies to Competing Industrial Customers
Management Science
Selling and Leasing Strategies for Durable Goods with Complementary Products
Management Science
Introduction of New Technologies to Competing Industrial Customers
Management Science
Timing Successive Product Introductions with Demand Diffusion and Stochastic Technology Improvement
Manufacturing & Service Operations Management
Effects of E-Waste Regulation on New Product Introduction
Management Science
Implications of Channel Structure for Leasing or Selling Durable Goods
Marketing Science
Expert Systems with Applications: An International Journal
Perpetual Versus Subscription Licensing Under Quality Uncertainty and Network Externality Effects
Journal of Management Information Systems
Decision Support Systems
Consumer Valuation of Modularly Upgradeable Products
Management Science
The Role of Modular Upgradability as a Green Design Strategy
Manufacturing & Service Operations Management
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A durable-goods monopolist who will be introducing new and improved versions of his product must decide how to price his products, keeping in mind the relative attractiveness of the current and future products. Dhebar (1994) has shown that if technology is changing too quickly and the producer cannot credibly commit to future prices and quality, then no equilibrium strategy exists. That is, there is no credible strategy for the future product that the producer can commit to in the first period. We show that an equilibrium pricing strategy exists if the monopolist does not offer upgrade pricing, that is, special pricing to consumers who have bought an earlier version. The author shows the possible purchase patterns in equilibrium and derives the optimal pricing strategy.