Journal article
Monopoly with endogenous durability
Journal of economic dynamics & control, Vol.26(6), pp.1009-1027
06/01/2002
DOI: 10.1016/S0165-1889(01)00007-0
Abstract
A multi-period formulation for a durable-good monopoly is developed where production and durability are decision variables. When commitment to production is possible, neither the level nor the depreciation rate of initial stock has an effect on the selected efficient degree of durability. With time-consistent production policy, the optimal degree of durability is less than the efficient rate and typically increasing in the initial stock and initial degree of durability. When a monopolist can switch at any time from an inefficient non-durable to an efficient durable, there exists a cutoff durability above which only the non-durable will be produced; otherwise the efficient durable will be produced.
Details
- Title: Subtitle
- Monopoly with endogenous durability
- Creators
- Gary Fethke - University of IowaRaj Jagannathan - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of economic dynamics & control, Vol.26(6), pp.1009-1027
- DOI
- 10.1016/S0165-1889(01)00007-0
- ISSN
- 0165-1889
- eISSN
- 1879-1743
- Publisher
- Elsevier B.V
- Number of pages
- 19
- Language
- English
- Date published
- 06/01/2002
- Academic Unit
- Business Analytics
- Record Identifier
- 9984963045902771
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