(Un)finished products

We study a seller’s choice between offering a finished or unfinished product. Finishing the product is costly and fully reveals its value to prospective buyers, while selling it unfinished introduces uncertainty about the product’s value and requires buyers to complete development themselves. Under symmetric information—i.e., when the seller also observes the value of a finished product—it is optimal to offer a finished product whenever development costs are low. Under asymmetric information, however, finishing the product introduces informational frictions. We characterize the conditions under which the product is offered finished despite these frictions, in order to discourage consumer search.