IDEAS home Printed from https://ideas.repec.org/p/lsu/lsuwpp/2006-16.html
   My bibliography  Save this paper

Non-Profit Firms and the Provision of Durable Goods

Author

Listed:
  • Gregory E. Goering

Abstract

A simple linear demand two-period durable goods is analyzed where the durable good is provided by private non-profit organization (NPO). A novel flexible objective function is utilized that allows for both the �commercial� and �social concern� aspects of NPOs. The model indicates NPO�s will not typically provide the efficient cost-minimizing durability in sales markets. Indeed, if the NPO cannot credibly commit to its own stakeholders it will manufacture output with less durability than a pure for-profit seller. We show the NPO�s level of commitment ability and social concern with its stakeholders is crucial for determining the amount of �planned obsolescence� that would prevail if NPOs expand into durable goods markets. Interestingly, the social concern commonly cited for the existence of NPOs, is a double edged sword since it may cause more or less product obsolescence.

Suggested Citation

  • Gregory E. Goering, 2006. "Non-Profit Firms and the Provision of Durable Goods," Departmental Working Papers 2006-16, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2006-16
    as

    Download full text from publisher

    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap06_16.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gregory Goering & Michael Pippenger, 2002. "Durable Goods Monopoly and Forward Markets," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(2), pages 271-282.
    2. Swan, Peter L, 1970. "Durability of Consumption Goods," American Economic Review, American Economic Association, vol. 60(5), pages 884-894, December.
    3. Richard Schmalensee, 1974. "Market Structure, Durability, and Maintenance Effort," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(2), pages 277-287.
    4. Waldman, Michael, 1996. "Durable Goods Pricing When Quality Matters," The Journal of Business, University of Chicago Press, vol. 69(4), pages 489-510, October.
    5. Butz, David A, 1990. "Durable-Good Monopoly and Best-Price Provisions," American Economic Review, American Economic Association, vol. 80(5), pages 1062-1076, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gregory E. Goering, 2007. "Durable‐Goods Monopoly With Maintenance," Bulletin of Economic Research, Wiley Blackwell, vol. 59(3), pages 231-246, July.
    2. Goering, Gregory E., 2007. "Durability choice with differentiated products," Research in Economics, Elsevier, vol. 61(2), pages 105-112, June.
    3. Gerstle, Ari D. & Waldman, Michael, 2016. "Mergers in durable-goods industries: A re-examination of market power and welfare effects," Research in Economics, Elsevier, vol. 70(4), pages 677-692.
    4. Goering, Gregory E., 2008. "Socially concerned firms and the provision of durable goods," Economic Modelling, Elsevier, vol. 25(3), pages 575-583, May.
    5. Adriano A. Rampini, 2019. "Financing Durable Assets," American Economic Review, American Economic Association, vol. 109(2), pages 664-701, February.
    6. Goering, Gregory E. & Sarangi, Sudipta, 2012. "Durable goods produced by state owned enterprises," Economic Modelling, Elsevier, vol. 29(3), pages 893-899.
    7. Justin P. Johnson & Michael Waldman, 2010. "Leasing, Lemons, and Moral Hazard," Journal of Law and Economics, University of Chicago Press, vol. 53(2), pages 307-328, May.
    8. Kinokuni, Hiroshi & Ohkawa, Takao & Okamura, Makoto, 2010. ""Planned antiobsolescence" occurs when consumers engage in maintenance," International Journal of Industrial Organization, Elsevier, vol. 28(5), pages 441-450, September.
    9. Galiani, Sebastian & Jaitman, Laura & Weinschelbaum, Federico, 2020. "Crime and durable goods," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 146-163.
    10. Pasquale Schiraldi, 2006. "Second-Hand Markets and Collusion by Manufacturers of Semidurable Goods," Boston University - Department of Economics - Working Papers Series WP2006-028, Boston University - Department of Economics.
    11. Oded Koenigsberg & Rajeev Kohli & Ricardo Montoya, 2011. "The Design of Durable Goods," Marketing Science, INFORMS, vol. 30(1), pages 111-122, 01-02.
    12. Gregory E. Goering, 2011. "Gun Buybacks and Firm Behavior: Do Buyback Programs Really Reduce the Number of Guns?," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 31-42, February.
    13. Jonathan R. Peterson & Henry S. Schneider, 2017. "Beautiful Lemons: Adverse Selection in Durable-Goods Markets with Sorting," Management Science, INFORMS, vol. 63(9), pages 3111-3127, September.
    14. Michael Waldman, 2004. "Antitrust Perspectives for Durable-Goods Markets," CESifo Working Paper Series 1306, CESifo.
    15. Eric W. Bond & Toshiaki Iizuka, 2014. "Durable Goods Price Cycles: Theory And Evidence From The Textbook Market," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 518-538, April.
    16. Morton I. Kamien & Nancy Schwartz, 1975. "Optimal Capital Accumulation and Durable Goods Production," Discussion Papers 141, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    17. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2010. "Price and quality in spatial competition," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 471-480, November.
    18. Campbell, James D., 2015. "Ownership and pricing of information: A model and application to open access," Information Economics and Policy, Elsevier, vol. 33(C), pages 29-42.
    19. Kumar, Praveen, 2006. "Intertemporal price-quality discrimination and the Coase conjecture," Journal of Mathematical Economics, Elsevier, vol. 42(7-8), pages 896-940, November.
    20. Carlaw, Kenneth I., 2005. "Optimal obsolescence," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 69(1), pages 21-45.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:lsu:lsuwpp:2006-16. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/delsuus.html .

    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.