Design Innovation and Fashion Cycles
Abstract
A model of fashion cycles is developed in which designs are used as a signaling device in a 'dating game.' A monopolist periodically creates a new design. Over time the price of the design falls as it spreads across the population. Once sufficiently many consumers own the design it is profitable to create a new design and thereby render the old design obsolete. This paper gives conditions under which all consumers would be better-off by banning the use of fashion. Competition among designers may lead to less frequent changes in fashion and to higher prices than monopoly. Copyright 1995 by American Economic Association.Download Info
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Bibliographic Info
Article provided by American Economic Association in its journal American Economic Review.
Volume (Year): 85 (1995)
Issue (Month): 4 (September)
Pages: 771-92
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Handle: RePEc:aea:aecrev:v:85:y:1995:i:4:p:771-92
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For corrections or technical questions regarding this item, or to correct its listing, contact: (Jane Voros) or (Michael P. Albert).
Related research
Keywords:Other versions of this item:
- Wolfgang Pesendorfer, 1993. "Design Innovation and Fashion Cycles," Discussion Papers 1049, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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