Pricing in the international takeoff of new products

• We model impact of relative price and price volatility on product takeoff.
• Both relative price and price volatility significantly impact the hazard of takeoff.
• The effect of price volatility is moderated by wealth, culture and contagion.
• Temporally-disaggregate data helps more precisely identify takeoff.
• Temporally-disaggregate data helps identify price volatility effect.

This study focuses on the effect of two dimensions of price (relative price and price volatility) on the international takeoff of new products. The study examines these drivers of takeoff using a novel data set of bimonthly observations of 7 new consumer electronic products in 8 countries. The empirical analysis reveals that both relative price and price volatility significantly impact the hazard of takeoff. However, although the effect of relative price is stable across contexts, the effects of price volatility are moderated by wealth, culture, and contagion. The use of temporally disaggregate data at the bimonthly level allows for the identification of the effect of price volatility and enables a more precise identification of takeoff than that achievable with annual data.