Recently, a growing number of media platforms have allowed users to pay for a premium version of their service that removes ads. A classic example is YouTube, which launched YouTube Red that is a paid service with no ads. This is puzzling because these platforms historically rely on advertising revenues to grow. In this research we develop a game theory ... Read More

In the past few years, a number of digital and media platforms, e.g., YouTube and Spotify, have begun introducing premium services which let paid subscribers see fewer or no adverts. Such a practice seems to be a classic case of second-degree price discrimination through ‘versioning’, which allows consumers to self-select different models of the same product ... Read More

Managing new products is important for many firms. One challenging problem is how to predict the success of a new product, especially in their early life cycle. Using large-scale retailer data, we find the novel prediction that the early success of a new product among certain customers may have negative—rather than positive—implications for the long-term ... Read More

Managing new products is important for many firms. One challenging problem is how to predict the success of a new product, especially in their early life cycle. Using large-scale retailer data, we find the novel prediction that the early success of a new product among certain customers may have negative—rather than positive—implications for the long-term ... Read More

In today’s digital era, online research plays a key part in the decision to buy a particular product or brand. The enormous amount of product information instantly available to customers on the Internet has changed the way they choose between similar offerings. Shedding light on this complex process, Assistant Professor Song Lin of HKUST’s Department of ... Read More

Managing new products is important for many firms. One challenging problem is how to predict the success of a new product, especially in their early life cycle. Using large-scale retailer data, we find the novel prediction that the early success of a new product among certain customers may have negative—rather than positive—implications for the long-term ... Read More

Hotels, like any businesses, are motivated by profit. But a strange pattern has emerged when it comes to low-cost amenities such as Internet services. One survey found only 54 per cent of luxury hotels offered free Internet compared to 91 per cent of budget hotels. As Song Lin points out, this phenomenon seems counterintuitive and has not been explained ... Read More

Diet Crystal Pepsi was launched in 1992 after getting a strong response in test markets, but a year later the product was pulled from the shelves after weak sales. Similarly, Frito Lay Lemonade and countless other products that passed the pilot phase went on to be failures. How could there be such a mismatch of early promise and subsequent performance? ... Read More

How do consumers learn from their consumption experience? Imagine new parents have to shop for diapers for the first time, with little prior knowledge. As they find out more about different brands in the following weeks and months through experience, they face a “strategic” choice. In other words, they can “exploit” their knowledge and select the most ... Read More