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Trade-in programs in the context of technological innovation with herding

Paolo Pellizzari, Elena Sartori () and Marco Tolotti
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Elena Sartori: Dept. of economics, Università Ca' Foscari Venice

No 4, Working Papers from Venice School of Management - Department of Management, Università Ca' Foscari Venezia

Abstract: We study optimal pricing strategies and consequent market shares' dynamics in a transition from an old and established technology to a new one. We simulate an agentbased model, in which a large population of possible buyers decide whether to adopt or not depending on prices, private signals and herding behavior. The firm, on its part, sets prices to maximize revenues. We show that trade-in programs, in practice comparable to very aggressive discounts, are supported by a rational attitude.

Keywords: agent-based models; mobile phone market; random utilities; technology competition; threshold models (search for similar items in EconPapers)
JEL-codes: C63 C73 O33 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2014-04
New Economics Papers: this item is included in nep-cmp, nep-com, nep-ger, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Chapter: Trade-In Programs in the Context of Technological Innovation with Herding (2015)
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