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 fa...
| Main Authors: | , |
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| Format: | Working paper |
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University of Oxford
2011
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| _version_ | 1797053848166072320 |
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| author | Gill, D Sgroi, D |
| author_facet | Gill, D Sgroi, D |
| author_sort | Gill, D |
| collection | OXFORD |
| description | 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. |
| first_indexed | 2024-03-06T18:49:17Z |
| format | Working paper |
| id | oxford-uuid:0fa08b08-3a9a-4ec1-990a-e7b04b0edd73 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T18:49:17Z |
| publishDate | 2011 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:0fa08b08-3a9a-4ec1-990a-e7b04b0edd732022-03-26T09:52:11ZThe optimal choice of pre-launch reviewerWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:0fa08b08-3a9a-4ec1-990a-e7b04b0edd73Bulk import via SwordSymplectic ElementsUniversity of Oxford2011Gill, DSgroi, DWe 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. |
| spellingShingle | Gill, D Sgroi, D The optimal choice of pre-launch reviewer |
| title | The optimal choice of pre-launch reviewer |
| title_full | The optimal choice of pre-launch reviewer |
| title_fullStr | The optimal choice of pre-launch reviewer |
| title_full_unstemmed | The optimal choice of pre-launch reviewer |
| title_short | The optimal choice of pre-launch reviewer |
| title_sort | optimal choice of pre launch reviewer |
| work_keys_str_mv | AT gilld theoptimalchoiceofprelaunchreviewer AT sgroid theoptimalchoiceofprelaunchreviewer AT gilld optimalchoiceofprelaunchreviewer AT sgroid optimalchoiceofprelaunchreviewer |