IDEAS home Printed from https://ideas.repec.org/a/ucp/jnlbus/v79y2006i1p137-148.html
   My bibliography  Save this article

Planned Obsolescence and Social Welfare

Author

Listed:
  • Atsuo Utaka

    (Kyoto University)

Abstract

Durable-goods marketing has an obsolescence effect on older models. I consider two cases: commitment (where the decision on how much to invest in marketing is made in the first period) and noncommitment (where the decision is made in the second period). I focus on the fact that the introduction of a higher quality model lowers the utility of consumers using an older model. I show that, in both cases, the equilibrium level of marketing rises above the socially optimal level. The point is that a larger obsolescence effect promotes replacement demand, driving the monopolist to spend more than is socially optimal.

Suggested Citation

  • Atsuo Utaka, 2006. "Planned Obsolescence and Social Welfare," The Journal of Business, University of Chicago Press, vol. 79(1), pages 137-148, January.
    • Handle: RePEc:ucp:jnlbus:v:79:y:2006:i:1:p:137-148
    DOI: 10.1086/497408
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/497408
    File Function: main text
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/497408?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Utaka, Atsuo, 2008. "Pricing strategy, quality signaling, and entry deterrence," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 878-888, July.
    2. Atsuo Utaka, 2015. "High Price Strategy and Quality Signalling," The Japanese Economic Review, Japanese Economic Association, vol. 66(3), pages 408-420, September.
    3. Joseph Guiltinan, 2010. "Consumer durables replacement decision-making: An overview and research agenda," Marketing Letters, Springer, vol. 21(2), pages 163-174, June.
    4. Atsuo Utaka, 2022. "Clearance sales and new product introduction," The Japanese Economic Review, Springer, vol. 73(3), pages 539-554, July.
    5. Kuppelwieser, Volker G. & Klaus, Phil & Manthiou, Aikaterini & Boujena, Othman, 2019. "Consumer responses to planned obsolescence," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 157-165.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:79:y:2006:i:1:p:137-148. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.jstor.org/journal/jbusiness .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.