Author: Giuseppe ColangeloPublisher:
ISBN:
Category :
Languages : it
Pages : 11
Book Description
Strategic buyers in a durable goods monopoly
Author: Giuseppe ColangeloPrice and Quality Discrimination in Durable Goods Monopoly with Resale Trading
Author: Praveen KumarPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
We examine a durable goods monopolist's optimal dynamic price and product quality strategy when buyers are rational, have diverse tastes, and can trade used durables among themselves. Our analysis makes four main points. First, in contrast to the well-known time-inconsistency problem of the durable goods monopolist, intertemporal quality discrimination introduces a time-inconsistency problem of not raising prices against the high-valuation consumers who may delay purchase in hope of quality upgrades. Resale trading ameliorates this time-inconsistency problem and allows the monopolist to effectively discriminate, especially when the buyers are patient. Second, the monopolist's optimal price and quality offers in the new good market may have complex dynamic patterns that depend crucially on the discount factor. In particular, for low discount factors, new good prices can fall as product quality improves even in the absence of any entry threats or learning economies. Third, initial quality distortions will be followed by steady-state quality allocations that are always efficient for the high-valuation buyers, and sometimes also for the marginal consumer-types. Finally, both the resale trading frequency and the price discount for secondhand goods is driven by the pace of strategic quality obsolescence in the new good market.
Durable Goods Monopoly, Buyer Uncertainty, and Concurrent Selling and Renting
Author: Gregory E. GoeringPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Stylized durable goods monopoly models typically conclude that monopolists prefer to rent their output due to commitment problems associated with sales. However, we commonly observe monopolistic firms in durable goods industries simultaneously selling and renting output. To address this apparent discrepancy a simple two-period asymmetric information model is constructed where buyers are uncertain of the good's durability and the firm's manufacturing costs. This is a natural asymmetric information specification since the firm typically has more precise knowledge of product durability and production costs than buyers do. The analysis indicates that a monopolist may wish to concurrently sell and rent output when buyers do not have perfect knowledge. If, for example, consumers believe that product durability and manufacturing costs are higher than they truly are, the firm may wish to simultaneously sell and rent output. Thus buyers' expectations about firm costs and product durability are of critical importance in durable goods models, particularly in terms of explaining concurrent rentals and sales.
Strategic Buyers and the Social Cost of Monopoly
Author: Tore EllingsenMonopoly Production and Pricing of Finitely Durable Goods with Strategic Consumers' Fluctuating Willingness to Pay
Author: Vera TilsonDurable Goods Monopoly and Futures Markets
Author: Ronald W. AndersonPublisher:
ISBN:
Category : Durable goods, Consumer
Languages : en
Pages : 44
Book Description
Durable Goods Monopoly with Privately Known Impatience
Author: Werner GüthPacman Refutes the Coase Conjecture
Author: Mark BagnoliPublisher:
ISBN:
Category : Game theory
Languages : en
Pages : 18
Book Description
Foundations in Microeconomic Theory
Author: Matthew O. JacksonPublisher: Springer Science & Business Media
ISBN: 3540740570
Category : Business & Economics
Languages : en
Pages : 541
Book Description
This volume collects papers from Hugo Sonnenschein's students. It aims to demonstrate his tremendous impact as an advisor. The papers span decades and present some of the most important articles in microeconomic theory. Each paper is accompanied with a preface by the student providing background on the paper and indicating Hugo's influence on its genesis. The papers all lie in microeconomic theory, and moreover all make fundamental contributions to the foundations of the theory.
The Durapolist Puzzle
Author: Barak OrbachPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This Article studies the durapolist, the durable-goods monopolist. Durapolists have long argued that, unlike perishable-goods monopolists, they face difficulties in exercising market power despite their monopolistic position. During the past thirty years, economists have extensively studied the individual arguments durapolists deploy regarding their inability to exert market power. While economists have confirmed some of these arguments, a general framework for analyzing durapolists as a distinct group of monopolists has not emerged. This Article offers such a framework. It first presents the problems of durapolists in exercising market power and explains how courts have treated these problems. It then analyzes the strategies durapolists have devised to overcome difficulties in acquiring and maintaining monopoly power and the legal implications of these strategies. This Article's major contributions are (a) expanding the conceptual scope of the durapolist problem, (b) presenting the durapolist problem as an explanation for many common business practices employed by durapolists, and (c) analyzing the legal implications of strategies employed to overcome the durapolist problem.