On the Limitation of Warranty Duration
This paper analyzes the frequently-observed phenomenon that firms offer product warranties that are of much shorter duration than the life expectancy of these products. It is shown that competitive equilibria may entail limitation of warranty duration if firms face adverse selection problems with respect to different consumers. Copyright 1989 by Blackwell Publishing Ltd.
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Volume (Year): 37 (1989)
Issue (Month): 3 (March)
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