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Contracting for "retention" and "conquest" facilitating information

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An important use of information in today's information-intensive business world is to facilitate the modification of existing products (a recent survey concludes that 80% of new product activity involves modifications to existing products). In fact, information and expertise, which helps identify consumers' preferences for different attributes, is critical to the development of a profitable product modification strategy. Many independent vendors possess such information and a key question for a vendor is how to contract the use of this information to downstream firms. The paper focuses on two distinct types of product modification information.

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