In settings such as investing for retirement or choosing a drug plan, individuals typically face a large number of options. In this paper, we analyze how the size of the choice set influences which alternative is selected. We present both laboratory experiments and field data that suggest larger choice sets induce a stronger preference for simple, easy-to-understand options.
Differentiated product models are predicated on the belief that a product's utility can be derived from the summation of utilities for its individual attributes. In one framed field experiment and two natural field experiments, we test this assumption by experimentally manipulating the order of attribute presentation in the product customization process of custom-made suits and automobiles.
Organized groups face a fundamental problem of how to distribute resources fairly. We found people view it as less fair to distribute resources equally when the allocated resource invokes the market by being a medium of exchange than when the allocated resource is a good that holds value in use. These differences in fairness can be attributed to being a medium of exchange, and not to other essential properties of money (i.e., being a unit of account or a store of value).
Automobile manufacturers in the U.S. supply chain exhibit significant differences in their days-of-supply of finished vehicles (average inventory divided by average daily sales rate). For example, from 1995 to 2004, Toyota consistently carried approximately 30 fewer days-of-supply than General Motors. This suggests that Toyota's well-documented advantage in manufacturing efficiency, product design and upstream supply chain management extends to their finished-goods inventory in their downstream supply chain from their assembly plants to their dealerships.
Since Max Barenbrug and Eduard Zanen founded Bugaboo, a baby stroller company, in 1995, the company had grown into a global corporation with over 800 people worldwide. Such rapid growth and accretion of brand equity presented Bugaboo with both opportunities and challenges. Max's vision was to become "the leading mobility brand in the world." To achieve this vision, the company would have to introduce new products in categories outside of strollers. How could the company capture and replicate the essence of what drove its initial success?
The fields of statistics and econometrics have developed powerful methods for testing the validity (specification) of a model based on its fit to underlying data. Unlike statisticians, managers are typically more interested in the performance of a decision rather than the statistical validity of the underlying model. We propose a framework and a statistical test that incorporates decision performance into a measure of statistical validity. Under general conditions on the objective function, asymptotic behavior of our test admits a sharp and simple characterization.
This chapter reviews multiproduct dynamic pricing models for a revenue maximizing monopolist firm. The baseline model studied in this article is of a seller that owns a fixed capacity of a resource that is consumed in the production or delivery of some type of product. The seller selects a dynamic pricing strategy for the offered product so as to maximize its total expected revenues over a finite time horizon.
We review a selected set of tools and frameworks for customer-centric new product development. We structure our review around the typical steps of the new product development process: opportunity identification, idea generation, design, testing, and launch. The list of topics addressed in this chapter is by no means exhaustive. We focus on topics which tend to be more recent and to present opportunities for further development and research.