Planned obsolescence and marketing strategy
AbstractBy using a two-period model of a durable goods monopolist, we investigate marketing activities that have an obsolescence effect on products already sold in the past period. We assume that the monopolist can stimulate consumer demand for second-period products by marketing activities, and analyse not only the case where the level of marketing is determined in the second period, but also the case where it is determined in advance, namely, in the first period. It is shown that the equilibrium level of marketing becomes higher than the efficiency level not only in the former case, but also in the latter case if the obsolescence effect is not so large. Copyright © 2000 John Wiley & Sons, Ltd.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 21 (2000)
Issue (Month): 8 ()
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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
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.:
- Bulow, Jeremy I, 1982. "Durable-Goods Monopolists," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(2), pages 314-32, April.
- Daniel A. Levinthal & Devavrat Purohit, 1989. "Durable Goods and Product Obsolescence," Marketing Science, INFORMS, INFORMS, vol. 8(1), pages 35-56.
- Atsuo Utaka, 2001. "The Learning Curve and Durable-Goods Production," Economics Bulletin, AccessEcon, vol. 12(5), pages 1-8.
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