New Product Development with Internet-Based Information Markets: Theory and Empirical Application

Successful new product development is crucial for firms’ competitive advantage. Despite various sophisticated methods and high investments, new products still face notoriously high failure rates. A very critical stage in new product development is product concept testing for the go/no-go decision in further product development. Since there is a high number of different product concepts to test, there obviously is a need for a reliable, valid and efficient method, which can benefit from the scalability and interactivity of Internet-based technologies. Internet-based information markets are a new method to support new product development, based on the market efficiency hypothesis. We empirically evaluate product concepts with information markets. Further, we compare the results of the information markets with traditional research methods.