"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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- Waldman, Michael, 1996. "Durable Goods Pricing When Quality Matters," The Journal of Business, University of Chicago Press, vol. 69(4), pages 489-510, October.
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- Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-49, April.
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- Kinokuni, Hiroshi, 1999. "Repair Market Structure, Product Durability, and Monopoly," Australian Economic Papers, Wiley Blackwell, vol. 38(4), pages 343-53, December.
- Hodaka Morita & Michael Waldman, 2004. "Durable Goods, Monopoly Maintenance, and Time Inconsistency," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(2), pages 273-302, 06.
- Michael Waldman, 2003. "Durable Goods Theory for Real World Markets," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 131-154, Winter.
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