An economic analysis of product pre-announcements

Jay Pil Choi, Eirik Gaard Kristiansen, Jae Nahm

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

In markets with ongoing technological progress, buyers must choose when to buy. These buy/wait decisions may have a significant impact on innovators' and buyers' surpluses. In making these decisions, buyers often rely on information provided by firms. For instance, it is a common practice for firms to announce new products well in advance of actual market availability in information goods industries such as computer software. However, since sellers and buyers, in many cases, have opposing interests, it is difficult for a firm to make credible product pre-announcements. In this paper, we study when and how firms can make credible pre-announcements. We focus particularly on how firms can build a reputation for being honest. We also review the literature on the effects of product pre-announcement on market competition and discuss several open issues in need of further research.

Original languageEnglish
Pages (from-to)299-319
Number of pages21
JournalCESifo Economic Studies
Volume51
Issue number2-3
DOIs
Publication statusPublished - 2005 Jun 1

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Economics and Econometrics

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