We call a product customizable if some of its attributes can be adjusted by buyers after purchase. In this paper, we study a market in which the seller(s) exerts cognitive efforts to find the optimal product design, and retains the option to make the product customizable for buyers to adjust...

We study a bilateral trade environment in which a seller exerts cognitive efforts to identify the optimal product design for a buyer. Should the seller fail to discover the innovative design, he has the option to induce additional cognition from the buyer by making the product flexible at an...