Product strategies under durability, lock-in and assortment considerations
| dc.contributor.advisor | Gilbert, Stephen M. | en |
| dc.creator | Jonnalagedda, Sreelata | en |
| dc.date.accessioned | 2010-06-21T15:01:28Z | en |
| dc.date.accessioned | 2017-05-11T22:20:00Z | |
| dc.date.available | 2010-06-21T15:01:28Z | en |
| dc.date.available | 2017-05-11T22:20:00Z | |
| dc.date.issued | 2009-12 | en |
| dc.description | text | en |
| dc.description.abstract | In this dissertation I focus on two considerations that influence the product strategy of a firm. The first is consumers’ choice and its influence on a firm’s product offering, and the second is the interaction between durable products and their contingent consumables. First, I study the assortment planning problem for a firm; I illustrate the complexity of solving this product selection problem, present simple solutions for some commonly used choice models, and develop heuristics for other practically motivated models. Second, I study the incentives of a durable goods monopolist when she can lock-in consumers through a contingent consumable. Adopting a lock-in strategy has two interesting effects on the incentives of a durable goods manufacturer. On one hand, by locking-in consumers to its consumable, a durable goods monopolist can curb its temptation to reduce durable prices over time, thereby mitigating the classic time inconsistency problem. On the other hand, lock-in will create a hold-up issue and adversely affect consumers’ expectations of future prices for the consumable. My research demonstrates the trade-off between time inconsistency and hold-up, and derives insights about the conditions under which a lock-in strategy can be effective. I further analyze the trade-off between time inconsistency and hold-up associated with lock-in in the presence of consumable stock-piling. My findings indicate in the presence of consumer stock-piling, lock-in has an effect similar to that of competition in the consumables market: they help to dampen the hold-up problem that arises from lock-in and at the same time increase the manufacturer’s incentive to reduce durable prices over time. | en |
| dc.description.department | Information, Risk, and Operations Management (IROM) | en |
| dc.format.medium | electronic | en |
| dc.identifier.uri | http://hdl.handle.net/2152/7833 | en |
| dc.language.iso | eng | en |
| dc.rights | Copyright is held by the author. Presentation of this material on the Libraries' web site by University Libraries, The University of Texas at Austin was made possible under a limited license grant from the author who has retained all copyrights in the works. | en |
| dc.subject | Product strategy | en |
| dc.subject | Consumers | en |
| dc.subject | Durable products | en |
| dc.subject | Consumables | en |
| dc.subject | Time inconsistency | en |
| dc.subject | Lock-in | en |
| dc.subject | Durable prices | en |
| dc.subject | Product selection | en |
| dc.subject | Hold-up | en |
| dc.title | Product strategies under durability, lock-in and assortment considerations | en |