Information on product quality, change agency and product adoption

Understanding the timing of adoption conditional on a quality signal is critically important for both managers and regulators. Facing uncertainty about true product quality, potential adopters typically have higher cost of adoption. In this paper, we argue that the perceived product quality depends on signals of objective product quality besides subjective information, learning effects and adopter characteristics. We consider the positive or negative signal of a change agent on quality as well as its timing. In agent-based failure time models, we analyze how the signals of objective product quality provided by a change agent influence the adoption behavior of individuals. We use product ratings for 21 new pharmaceuticals as stated by an independent health technology assessment agency as example for a change agent. In controlling for other aspects such as distribution channels, prices and the body of evidence, we find that products with a positive product signal provided by the change agent are adopted sig...