Microtheory Seminar Series. "Strategic Use of Product Delays to Shape Word-of-Mouth Communication"
Published: 27 April 2025
06 May 2025. Dr Alexei Parakhonyak, University of Oxford
Dr Alexei Parakhonyak, University of Oxford
"Strategic Use of Product Delays to Shape Word-of-Mouth Communication"
Tuesday, 06 May 2025. 16:00-17:30
Room 141A, Adam Smith Business School
Abstract
This article investigates the advantages a seller can gain by strategically creating product scarcity to manipulate consumer word-of-mouth communication. The seller offers a product of uncertain quality and chooses whether to immediately serve opinion leaders or delay their purchases. Leaders subsequently share their experiences with other consumers, potentially influencing these consumers’ beliefs and purchase decisions. We show that delaying leaders can increase seller profits by altering the content of word-of-mouth communication, except in niche markets where private information is highly accurate. If delaying leaders also reduces the overall level of word-of-mouth communication, then it becomes less attractive to induce delay.
Bio
I am an Associate Professor of Economics at the University of Oxford and Fellow at Lincoln College. Previously worked in Higher School of Economics, Moscow.
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First published: 27 April 2025