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Pricing Innovation: State of the Art and Automotive Applications

Author

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  • Jean-Jacques Chanaron

    (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique, MC - Management et Comportement - EESC-GEM Grenoble Ecole de Management)

Abstract

The paper aims at elaborating on pricing and business models for forthcoming innovative ITS devices, limiting its scope in particular to in-vehicle driving assistance systems and suggesting the various possible innovation and pricing strategies with theoretical discussions. The methodology is based on a comprehensive literature review of the major contributions made by the fields of managerial economics and management sciences to the study of pricing strategies and practices and, in particular, the pricing of innovative goods or services, in order to identify the strengths and weaknesses of the various schools of thought. The paper also gathers and analyzes the available data on two innovative navigation and safety devices for cars, namely ABS (Anti-Lock Braking System) and navigation systems, in order to put forward an initial interpretation.It concludes that there is no formula or even a vague method for determining "acceptable" price levels or "trigger points". There are two options, i.e. disruptive innovation which is by essence very risky and incremental innovation with each major model renewal.

Suggested Citation

  • Jean-Jacques Chanaron, 2008. "Pricing Innovation: State of the Art and Automotive Applications," Post-Print halshs-00371047, HAL.
    • Handle: RePEc:hal:journl:halshs-00371047
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00371047
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    References listed on IDEAS

    as
    1. Maral Kichian & Linda Khalaf, 2000. "Testing The Pricing-To-Market Hypothesis Case Of The Transportation Equipment Industry," Computing in Economics and Finance 2000 58, Society for Computational Economics.
    2. C. Monica Capra & Jacob K Goeree & Rosario Gomez & Charles A Holt, 2002. "Learning and Noisy Equilibrium Behavior in an Experimental Study of Imperfect Price Competition," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 613-636, August.
    3. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(4), pages 515-539.
    4. Jean-Jacques Chanaron, 1998. "Automobiles: a static technology, a ""wait-and-see"" industry ?," Grenoble Ecole de Management (Post-Print) halshs-00143994, HAL.
    5. Jean-Jacques Chanaron, 1998. "Automobiles: a static technology, a ""wait-and-see"" industry ?," Post-Print halshs-00143994, HAL.
    6. Jean-Jacques Chanaron, 2001. "Innovating in Intelligent Automobile Transportation: Towards an-industry-wide consortium ?," Grenoble Ecole de Management (Post-Print) halshs-00150778, HAL.
    7. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 375-394.
    8. Roth, Alvin E., 1993. "The Early History of Experimental Economics," Journal of the History of Economic Thought, Cambridge University Press, vol. 15(2), pages 184-209, October.
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