Abstract
We consider a firm's timing of new product introductions and pricing of multiple product generations. We analyse the case where a firm manages multiple generations of a product, and where demand of each generation is impacted by the prices of all existing generations and the introduction of new generations. In the case of two successive product generations, we provide closed-form expressions of the optimal product introduction time and optimal pricing strategies under two scenarios: the case of complete replacement of the base product by the new one, and the case of coexisting generations. We also extend our analysis and provide closed-form expressions to a duopoly environment for the complete replacement case. We believe our results are practical and can help firms better manage the product introduction and the life cycle pricing of multiple product generations.
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