Essays on Issues in New Product Introduction: Product Rollovers, Information Provision, and Return Policies

Abstract

In this dissertation we study several key issues faced by firms while introducing new products to market. The first essay looks at product rollovers: introduction of a new product generation while phasing out the old one. We study the strategic decision of dual vs. single roll jointly with operational decisions of inventory and pricing during this transitional period. Our results confirm previous findings and uncover the role and interaction of several parameters that were not examined before.

In the second essay, we investigate the role of information provision and return policies in the consumer purchasing behavior and on the overall market outcome. We build a novel model of consumer learning, and we attain significant analytical findings without making any distributional assumptions. We then fully study the joint optimization problem analytically under uniform valuations.

In the third essay, we study competition in the framework described in the second essay and we identify the potential Nash equilibria and associated conditions. Our findings demonstrate the effect of competition on return policy and information provision decisions and provide insight on some real-life observations.