We examine sales and leasing of a durable good in an asymmetric duopoly. We find that inefficient firms tend to lease more. While the low cost firm sells more than the high cost firm, the high cost firm leases more. Further, an increase in unit costs implies a higher ratio of leased units to sales. This pattern is reversed when the unit cost decreases significantly over time.
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Paper provided by Duke University, Department of Economics in its series Working Papers with number
99-07.
Length: Date of creation: 1999 Date of revision: Publication status: Published in ECONOMICS LETTERS, Vol. 66, 2000, pages 361-368 Handle: RePEc:duk:dukeec:99-07
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Find related papers by JEL classification: L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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