Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Good, the Bad, and the Complex: Product Design with Imperfect Information†

The Good, the Bad, and the Complex: Product Design with Imperfect Information† AbstractWe study the joint determination of product quality and complexity. In our model complexity affects how difficult it is for an agent to acquire information about product quality. An agent can accept or reject a product proposed by a designer, who can affect the quality and the complexity of the product. We find that complexity is not a necessary feature of low-quality products. An increase in designer–agent alignment leads to more complex but better-quality products. However, higher product demand or lower competition among designers leads to more complex and lower-quality products. We relate our findings to the existing empirical evidence. (JEL D82, D83, G23, L15, L51, L84) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal Microeconomics American Economic Association

The Good, the Bad, and the Complex: Product Design with Imperfect Information†

40 pages

Loading next page...
 
/lp/american-economic-association/the-good-the-bad-and-the-complex-product-design-with-imperfect-Q1hFoybpr4

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
American Economic Association
Copyright
Copyright © 2023 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20210114
Publisher site
See Article on Publisher Site

Abstract

AbstractWe study the joint determination of product quality and complexity. In our model complexity affects how difficult it is for an agent to acquire information about product quality. An agent can accept or reject a product proposed by a designer, who can affect the quality and the complexity of the product. We find that complexity is not a necessary feature of low-quality products. An increase in designer–agent alignment leads to more complex but better-quality products. However, higher product demand or lower competition among designers leads to more complex and lower-quality products. We relate our findings to the existing empirical evidence. (JEL D82, D83, G23, L15, L51, L84)

Journal

American Economic Journal MicroeconomicsAmerican Economic Association

Published: May 1, 2023

There are no references for this article.