Pricing New Products: Strategies and Caveats
This chapter shows how firms should price new products, especially under cost and demand uncertainty. It distinguishes between privately and publicly owned firms and show how the risk attitudes of the firm's owners affect new product prices; in addition, it evaluates the conditions under which the firm should announce or preannounce its new products in the marketplace.
Keywords: break-even pricing, cost-plus pricing, financial leverage, ownership structure, product announcements, product preannouncements, sunk costs, utility functions, risk attitudes
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