"Planned antiobsolescence" occurs when consumers engage in maintenance
This paper examines whether the built-in durability chosen by a durable-good monopolist and the actual durability associated with consumer maintenance are excessive or insufficient. Our research indicates that only in situations where both the consumer maintenance market and the secondhand market exist can the monopolist select a socially excessive durability level: that is, planned antiobsolescence requires both markets. However, overinvestment in built-in durability does not necessarily lead to a socially excessive level of actual durability. We also show that the existence of maintenance may enhance built-in durability, even though maintenance activity can partially recover the depreciation in durability.
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- Bulow, Jeremy, 1986. "An Economic Theory of Planned Obsolescence," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 729-49, November.
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