Product innovations and quality-adjusted prices

Arthur Fishman; Rafael Rob

doi:10.1016/s0165-1765(02)00154-4

Product innovations and quality-adjusted prices

Arthur Fishman, Rafael Rob

Department of Economics

University of Pennsylvania

Research output: Contribution to journal › Article › peer-review

10 Scopus citations

Abstract

A striking characteristic of high-tech products is the rapid decrease of their quality-adjusted prices. Empirical studies show that the rate of decrease of QAPs is typically not constant over time; QAPs decrease rapidly at early stages of the product and then the rate of decrease tapers off. Studies also suggest that the QAP is positively correlated with the rate of product introductions: The faster new products are introduced, the faster is the rate of decrease in their QAPs. This paper presents a dynamic model of product innovations consistent with these empirical regularities.

Original language	English
Pages (from-to)	393-398
Number of pages	6
Journal	Economics Letters
Volume	77
Issue number	3
DOIs	https://doi.org/10.1016/s0165-1765(02)00154-4
State	Published - 1 Nov 2002

Bibliographical note

Funding Information:
Rob acknowledges the support of the NSF under grant numbers 98-12681 and 01-36922.

Funding

Rob acknowledges the support of the NSF under grant numbers 98-12681 and 01-36922.

Funders	Funder number
National Science Foundation	01-36922, 98-12681

Keywords

Durable goods
Product innovation
Quality
Quality adjusted prices

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/s0165-1765(02)00154-4

Cite this

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AB - A striking characteristic of high-tech products is the rapid decrease of their quality-adjusted prices. Empirical studies show that the rate of decrease of QAPs is typically not constant over time; QAPs decrease rapidly at early stages of the product and then the rate of decrease tapers off. Studies also suggest that the QAP is positively correlated with the rate of product introductions: The faster new products are introduced, the faster is the rate of decrease in their QAPs. This paper presents a dynamic model of product innovations consistent with these empirical regularities.

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Product innovations and quality-adjusted prices

Abstract

Bibliographical note

Funding

Keywords

UN SDGs

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