Advanced Search
MyIDEAS: Login to save this article or follow this journal

Product Line Decisions and the Coase Conjecture

Contents:

Author Info

  • Kai-Uwe Kuhn
  • A. Jorge Padilla

Abstract

We show that the Coase conjecture does not hold when a durable-goods monopolist also sells nondurable goods that are demand related to the durable. The presence of nondurable complements or substitutes reduces the rate at which the monopolist introduces the durable into the market. The price of the durable does not converge to marginal cost. We analyze the incentives of a monopolist to extend his product line to a durable or a nondurable. Most significantly, the profit from adding a durable to the product line disappears as the time between offers becomes short. We study the effects of entry into markets for nondurables and their implications for merger policy.

Download Info

If 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.
File URL: http://links.jstor.org/sici?sici=0741-6261%28199622%2927%3A2%3C391%3APLDATC%3E2.0.CO%3B2-R&origin=repec
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 27 (1996)
Issue (Month): 2 (Summer)
Pages: 391-414

as in new window
Handle: RePEc:rje:randje:v:27:y:1996:i:summer:p:391-414

Contact details of provider:
Web page: http://www.rje.org

Order Information:
Web: https://editorialexpress.com/cgi-bin/rje_online.cgi

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mason, Robin, 2000. "Network externalities and the Coase conjecture," European Economic Review, Elsevier, Elsevier, vol. 44(10), pages 1981-1992, December.
  2. Ding, Yucheng, 2014. "Why Branded Firm may Benefit from Counterfeit Competition," MPRA Paper 52933, University Library of Munich, Germany.
  3. Cabral, Luis M. B. & Salant, David J. & Woroch, Glenn A., 1999. "Monopoly pricing with network externalities," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 17(2), pages 199-214, February.
  4. Chi, Woody Chih-Yi, 1999. "Quality choice and the Coase problem," Economics Letters, Elsevier, Elsevier, vol. 64(1), pages 107-115, July.
  5. Goering, Gregory E., 2007. "Durability choice with differentiated products," Research in Economics, Elsevier, Elsevier, vol. 61(2), pages 105-112, June.
  6. Fethke, Gary & Jagannathan, Raj, 2000. "Why would a durable good monopolist also produce a cost-inefficient nondurable good?," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 18(5), pages 793-812, July.
  7. Poddar, Sougata, 2004. "Strategic choice in durable goods market when firms move simultaneously," Research in Economics, Elsevier, Elsevier, vol. 58(2), pages 175-186, June.
  8. Didier LAUSSEL & Ngo Van LONG & Joana RESENDE, 2014. "Network Effects, Aftermarkets and the Coase Conjecture : A Dynamic Markovian Approach," Cahiers de recherche, Centre interuniversitaire de recherche en économie quantitative, CIREQ 06-2014, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  9. Hoppe, Heidrun C. & Lee, In Ho, 2003. "Entry deterrence and innovation in durable-goods monopoly," European Economic Review, Elsevier, Elsevier, vol. 47(6), pages 1011-1036, December.
  10. Kumar, Praveen, 2006. "Intertemporal price-quality discrimination and the Coase conjecture," Journal of Mathematical Economics, Elsevier, Elsevier, vol. 42(7-8), pages 896-940, November.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:27:y:1996:i:summer:p:391-414. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.