A BEJEAP Contributions article.

Abstract

Dynamic motivations for the use of product line extensions in the form of entry-level products are considered. When consumers are uncertain of their valuations for products, and their purchasing power evolves over time, firms competing in a lucrative luxury market may try to influence the future buying decisions of young consumers. Offering entry-level products allows young consumers to experiment and thereby make better future decisions. Despite this efficiency, so providing information to consumers need not benefit a firm. The dynamic motivations for offensive product introductions differ discretely from defensive introductions.

Submitted: March 26, 2005 · Accepted: July 19, 2005 · Published: September 17, 2005

Originally published in Contributions to Economic Analysis & Policy.

Recommended Citation

Johnson, Justin P. (2005) "Entry-Level Products with Consumer Learning," Contributions to Economic Analysis & Policy: Vol. 4 : Iss. 1, Article 9.
Available at: http://www.bepress.com/bejeap/contributions/vol4/iss1/art9