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Planned obsolescence and marketing strategy


  • Atsuo Utaka

    (Graduate School of Economics, Osaka University, Osaka, Japan)


By using a two-period model of a durable goods monopolist, we investigate marketing activities that have an obsolescence effect on products already sold in the past period. We assume that the monopolist can stimulate consumer demand for second-period products by marketing activities, and analyse not only the case where the level of marketing is determined in the second period, but also the case where it is determined in advance, namely, in the first period. It is shown that the equilibrium level of marketing becomes higher than the efficiency level not only in the former case, but also in the latter case if the obsolescence effect is not so large. Copyright © 2000 John Wiley & Sons, Ltd.

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  • Atsuo Utaka, 2000. "Planned obsolescence and marketing strategy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(8), pages 339-344.
  • Handle: RePEc:wly:mgtdec:v:21:y:2000:i:8:p:339-344
    DOI: 10.1002/mde.1007

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    References listed on IDEAS

    1. Daniel A. Levinthal & Devavrat Purohit, 1989. "Durable Goods and Product Obsolescence," Marketing Science, INFORMS, vol. 8(1), pages 35-56.
    2. Bulow, Jeremy I, 1982. "Durable-Goods Monopolists," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 314-332, April.
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    Cited by:

    1. Atsuo Utaka, 2001. "The Learning Curve and Durable-Goods Production," Economics Bulletin, AccessEcon, vol. 12(5), pages 1-8.
    2. Pangburn, Michael S. & Sundaresan, Shankar, 2009. "Capacity decisions for high-tech products with obsolescence," European Journal of Operational Research, Elsevier, vol. 197(1), pages 102-111, August.

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