Imperial College London
Portrait Picture

ProfessorTommasoValletti

Business School

Professor of Economics
 
 
 
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Contact

 

+44 (0)20 7594 9215t.valletti Website CV

 
 
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Location

 

417City and Guilds BuildingSouth Kensington Campus

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Summary

 

Publications

Citation

BibTex format

@article{Koca:2021:10.1111/poms.13459,
author = {Koca, E and Valletti, T and Wiesemann, W},
doi = {10.1111/poms.13459},
journal = {Production and Operations Management},
pages = {3698--3712},
title = {Designing digital rollovers: managing perceived obsolescence through release times},
url = {http://dx.doi.org/10.1111/poms.13459},
volume = {30},
year = {2021}
}
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RIS format (EndNote, RefMan)

TY  - JOUR
AB  - When releasing a new version of a durable product, a firm aims to attract new customers as well as persuadeits existing customer base to upgrade. This is commonly achieved through arollover strategy, which comprisesthe price of the new product as well as the decision to discontinue the sale of the existing product (solorollover) or to sell the existing product at a discounted price (dual rollover). In this paper, we argue thatthe timing of the new product release is an important—but commonly overlooked—third lever in the designof a successful rollover strategy. The release timing influences the consumers’ perception of obsolescence, bywhich an existing product is considered obsolete merely by reference to a new product. This reinforces theupgrading behavior of existing customers, but it also necessitates deep discounts of the existing product tokeep its sale viable in a dual rollover. We analyze the impact of the release timing on solo and dual rolloversin  markets  for  digital  goods  (i.e.,  where  production  costs  are  negligible)  that  are  composed  of  naive  andsophisticated consumers. Under the assumption that both the old and the new product would offer a similarutility if there was no perceived obsolescence, we show that in both markets a firm selecting the release timesfrom a continuous timeline can induce sufficiently large parts of its existing customer base to upgrade so thata solo rollover is optimal. We also characterize the resulting market segmentation, and we offer managerialas well as policy advice.
AU  - Koca,E
AU  - Valletti,T
AU  - Wiesemann,W
DO  - 10.1111/poms.13459
EP  - 3712
PY  - 2021///
SN  - 1059-1478
SP  - 3698
TI  - Designing digital rollovers: managing perceived obsolescence through release times
T2  - Production and Operations Management
UR  - http://dx.doi.org/10.1111/poms.13459
UR  - https://onlinelibrary.wiley.com/doi/10.1111/poms.13459
UR  - http://hdl.handle.net/10044/1/89630
VL  - 30
ER  -
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