Marketing Models of Service and Relationships
Marketing Science
Brands and Branding: Research Findings and Future Priorities
Marketing Science
Promotion Effect on Endogenous Consumption
Marketing Science
Generic and Brand Advertising Strategies in a Dynamic Duopoly
Marketing Science
Consumption Flexibility, Product Configuration, and Market Competition
Marketing Science
Price Competition in Markets with Consumer Variety Seeking
Marketing Science
The Sound of Silence: Observational Learning in the U.S. Kidney Market
Marketing Science
Social Learning and Dynamic Pricing of Durable Goods
Marketing Science
Exogenous Learning, Seller-Induced Learning, and Marketing of Durable Goods
Management Science
Product Reviews and Competition in Markets for Repeat Purchase Products
Journal of Management Information Systems
Optimal Search for Product Information
Management Science
Vertical Differentiation with Variety-Seeking Consumers
Management Science
Price and leadtime competition, and coordination for make-to-order supply chains
Computers and Industrial Engineering
Hi-index | 0.00 |
In several markets, consumers can gain further information regarding how well a product fits their preferences only by experiencing it after purchase. This could then generate loyalty for the products tried first. This paper considers a model in which consumers learn in the first period about the product they buy and then make choices in the second period about the competing products, given what they learned in the first period. The paper finds that if the distribution of valuations for each product is negatively (positively) skewed, a firm benefits (is hurt) in the future from having a greater market share today-the brand loyalty characteristic. With negative skewness, two effects are identified: On one hand, marginal forward-looking consumers are less price sensitive than myopic consumers, and this is a force toward higher prices. On the other hand, forward-looking firms realize that they gain in the future from having a higher market share in the current period and compete more aggressively in prices. For similar discount factors for consumers and firms, the latter effect dominates. The paper also characterizes the importance of consumer learning effects on the market outcome.