Learning by Doing and the Demand for Advanced Products

Yufeng Huang ()
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Yufeng Huang: Simon Business School, University of Rochester, Rochester, New York 14627

Marketing Science, 2019, vol. 38, issue 1, 107-128

Abstract: How much does consumer learning by doing affect the demand for advanced products? In the context of digital cameras, I use detailed picture-level data to directly measure changes in picture quality as a result of learning by doing or product switching. Although learning by doing builds up consumer human capital, a fraction of this human capital is product specific, creating consumer switching costs. To quantify the role of consumer human capital, I structurally estimate the demand for digital cameras with consumer learning by doing. The evolution of consumer human capital explains 23% of the sales of advanced digital cameras, whereas brand-specific human capital—arising from incompatibility in product design—explains 15% of consumer brand-choice inertia.

Keywords: consumer human capital; learning by doing; switching costs; product diffusion; dynamic programming (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:38:y:2019:i:1:p:107-128

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