"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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- Schmalensee, Richard, 1974. "Market Structure, Durability, and Maintenance Effort," Review of Economic Studies, Wiley Blackwell, vol. 41(2), pages 277-87, April.
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- Swan, Peter L, 1970. "Durability of Consumption Goods," American Economic Review, American Economic Association, vol. 60(5), pages 884-94, December.
- Michael Waldman, 2003. "Durable Goods Theory for Real World Markets," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 131-154, Winter.
- Su, Teddy T, 1975. "Durability of Consumption Goods Reconsidered," American Economic Review, American Economic Association, vol. 65(1), pages 148-57, March.
- Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-49, April.
- 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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