Regulating Adaptive New Products: Can Less Oversight Lead to Better Development Practices?

讲座内容简介：The literature on new product introduction pays little attention to how regulatory policies shape which products reach the market, despite strict oversight in many multibillion-dollar industries. We study this interaction for adaptive new products whose performance is hard to verify and evolves post-launch, such as medical devices enabled by artificial intelligence (AI). Motivated by ongoing regulatory reforms, we develop a two-stage game-theoretic model to compare a conventional pathway, which requires reclearance for post-launch updates, with a streamlined pathway, which allows certain planned updates to proceed without additional review. Our analysis focuses on products that are both adaptive (capable of post-launch improvement) and credence-like (whose true performance is difficult to observe). We identify a counterintuitive “Goldilocks zone” in which waiving reclearance yields higher welfare: when the technology's improvement potential is moderate or regulatory detection capability is limited, streamlined oversight not only enables innovation effort that would otherwise be discouraged but also strengthens incentives for truthful reporting at launch by tying the value of future improvement opportunities to initial approval. By contrast, when oversight is strong and improvement potential is high, reclearance remains the preferred approach because it deters and detects noncompliance without unduly slowing beneficial updates.
主讲人简介：Xin Fang is Associate Professor of Operations Management, MPA Research Fellow, and Director of PhD Programmes at Lee Kong Chian School of Business, Singapore Management University. He received his Ph.D. in Operations Management from Carnegie Mellon University. His research interests include competition and cooperation in supply chains, corporate social responsibility, digital economy and online platforms, and social and economic networks. Xin’s research has been published in leading journals including Manufacturing & Service Operations Management, Operations Research and Production and Operations Management. He also serves as Senior Editor for Production and Operations Management and Associate Editor for Omega.