Pricing Decisions with Product Return and Consumer Fit Uncertainty When firms introduce new products to the market, consumers usually have product fit uncertainty towards these new products and may not fully understand their characteristics before purchasing them. It is thus prevalent that firms offer product returns in order to mitigate consumersu0027 valuation risk. The objective of this study is to develop a twoperiod model with product return and investigate how consumersu0027 fit uncertainty and product knowledge affect the firmu0027s decisions and profit. The firm sells new products in the first period and refurbishes the returned products and sells them, along with the new products, in the second period. We find that when more consumers find product fit or when more consumers understand product characteristics, the quantity of returned products will be reduced, the selling prices of the products will be lowered, and the firmu0027s profit will be increased. On the other hand, when consumers have higher product valuation in the second period, the quantity of returned products will be reduced, the firstperiod selling price of the product will be lowered and the firmu0027s profit will be lowered.

Observational Learning in the Product Configuration Process: The Effect of Information Presentation Format With the booming of ecommerce, online product configurators have been applied in various industries to elicit customer needs and transform them into product variants. To facilitate customersu0027 choice navigation during configuration process, some configurators provide extra information about product, such as best seller options. Previous study shows that these kinds of information significantly affect consumer decision making process, a phenomenon often referred to as observational learning. This paper attempt to study the format of the information provided in configurators affects observational learning effect. Specifically, two kinds of information are investigated, namely, the best seller choice and customersu0027 choice distribution among all the attribute alternatives. We empirically investigate how different kinds of factors affect customers choices when the best seller and choices distribution information are provided. Our experiment shows that motivation to customize the product is significant in customersu0027 choices. While purchasing intention is significant only when best seller information is provided. We further notice that there is no much difference between peopleu0027s choices when best seller and the choice distribution information are provided.