Maintenance Commitments for Monopolized Goods
AbstractThis paper highlights the monopoly firms´ commitments for goods requiring high maintenance expenditure, such as elevators, televisions and computers. A guarantee time limit model to maintain these special goods is presented in this paper. Based on this model, several types of commitments with different guarantee time limits are compared under monopoly conditions. This paper finds that the guarantee pattern has no effect on the monopoly firm´s profits if all information is known to both the consumer and the monopolist. It is also shown that if a monopoly firm exaggerates its product quality claims in its advertisements, then it cannot meet its warranty guarantees. Industrial organizational theory is employed to analyze maintenance guarantees in this work.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Economics, Prague in its journal Prague Economic Papers.
Volume (Year): 2012 (2012)
Issue (Month): 1 ()
Postal: Editorial office Prague Economic Papers, University of Economics, nám. W. Churchilla 4, 130 67 Praha 3, Czech Republic
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D4 - Microeconomics - - Market Structure and Pricing
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zhiqi Chen, 1993.
"How Low is a Garanteed-Lowest-Price?,"
Carleton Industrial Organization Research Unit (CIORU)
93-03, Carleton University, Department of Economics.
- Dirk Krueger & Harald Uhlig, 2005.
"Competitive Risk Sharing Contracts with One-Sided Commitment,"
SFB 649 Discussion Papers
SFB649DP2005-003, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Krueger, Dirk & Uhlig, Harald, 2006. "Competitive risk sharing contracts with one-sided commitment," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1661-1691, October.
- Krueger, Dirk & Uhlig, Harald, 2005. "Competitive risk sharing contracts with one-sided commitment," CFS Working Paper Series 2005/07, Center for Financial Studies (CFS).
- Krüger, Dirk & Uhlig, Harald, 2004. "Competitive Risk Sharing Contracts with One-Sided Commitment," CEPR Discussion Papers 4208, C.E.P.R. Discussion Papers.
- Dirk Krueger & Harald Uhlig, 2003. "Competitive Risk Sharing Contracts with One-Sided Commitment," NBER Working Papers 10135, National Bureau of Economic Research, Inc.
- Dirk Krueger & Harald Uhlig, 2003. "Competitive Risk Sharing Contracts with One-Sided Commitment," Levine's Bibliography 666156000000000407, UCLA Department of Economics.
- Dirk Krueger & Hanno Lustig & Fabrizio Perri, 2007.
"Evaluating Asset Pricing Models with Limited Commitment using Household Consumption Data,"
NBER Working Papers
13650, National Bureau of Economic Research, Inc.
- Dirk Krueger & Hanno Lustig & Fabrizio Perri, 2008. "Evaluating Asset Pricing Models with Limited Commitment Using Household Consumption Data," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 715-726, 04-05.
- Krueger, Dirk & Lustig, Hanno & Perri, Fabrizio, 2006. "Evaluation asset pricing models with limited commitment using household consumption data," CFS Working Paper Series 2006/22, Center for Financial Studies (CFS).
- Atsuo Utaka, 2006. "Durable-Goods Warranties and Social Welfare," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(2), pages 508-522, October.
- Nie, Pu-yan, 2009. "Commitment for storable goods under vertical integration," Economic Modelling, Elsevier, vol. 26(2), pages 414-417, March.
- Igal Hendel & Paolo Dudine & Alessandro Lizzeri, 2006. "Storable Good Monopoly: The Role of Commitment," American Economic Review, American Economic Association, vol. 96(5), pages 1706-1719, December.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716.
- Kerk Phillips & Val Lambson, 2004.
"Market Structure and Schumpeterian Growth,"
Econometric Society 2004 Far Eastern Meetings
490, Econometric Society.
- Jean-Luc Gaffard & Michel Quéré, 2006. "What’s the aim for competition policy: optimizing market structure or encouraging innovative behaviors?," Journal of Evolutionary Economics, Springer, vol. 16(1), pages 175-187, April.
- Corts, Kenneth S., 1997. "On the competitive effects of price-matching policies," International Journal of Industrial Organization, Elsevier, vol. 15(3), pages 283-299, May.
- Arzu Akkoyunlu-Wigley & Sevinc Mihci, 2006. "Effects of the customs union with the European Union on the market structure and pricing behaviour of the Turkish manufacturing industry," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2443-2452.
- Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-49, April.
- Nie, Pu-yan, 2013. "Duopoly quality commitment," Economic Modelling, Elsevier, vol. 33(C), pages 832-842.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vaclav Subrta).
If references are entirely missing, you can add them using this form.