Timing the Sale When Buyers Are Uncertain
CITRIS Research Exchange, 2007
In October Professor Hemant Bhargava presented a talk titled “Economics of Information Structure: Timing the Sale when Buyers Have Uncertain Product Valuations,” at the Center for Information Technology Research in the Interest of Society (CITRIS) at UC Berkeley.
CITRIS is a collaborative, public-private partnership of more than 300 faculty and thousands of students at four UC campuses (Berkeley, Davis, Merced and Santa Cruz) with industrial researchers from more than 60 corporations to create information technology solutions for pressing social, environmental and healthcare problems.
Bhargava’s talk focused on how products are sold when customers are uncertain. Examples of these types of transactions include advanced-purchased electronic tickets, smart cards, mobile phone packages, web hosting plans and other technologies. In these examples firms are selling their service/product in advance of consumption and the consumer is uncertain how much of the product/service they will use. Over time customers become more certain and better informed about the products and their needs, so that a firm can influence the information structure through its decision on timing of the sale.