Dynamic Durable Goods Monopoly and Market Power
We analyze a vertically differentiated market for an imperfectly durable good served by a monopolist in an infinite-horizon, discrete-time game. Our goal is to identify the Markov perfect stationary equilibria where the seller can maintain his monopoly power. We establish that the set of parameters...
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| Format: | Article |
| Language: | English |
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MDPI AG
2020-05-01
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| Series: | Games |
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| Online Access: | https://www.mdpi.com/2073-4336/11/2/22 |
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doaj-dab96281326243cbaaeb3458d7345cdf2020-11-25T02:37:47ZengMDPI AGGames2073-43362020-05-0111222210.3390/g11020022Dynamic Durable Goods Monopoly and Market PowerBasak Altan0Department of Economics, Ozyegin University, 34794 Istanbul, TurkeyWe analyze a vertically differentiated market for an imperfectly durable good served by a monopolist in an infinite-horizon, discrete-time game. Our goal is to identify the Markov perfect stationary equilibria where the seller can maintain his monopoly power. We establish that the set of parameters supporting a monopoly outcome is larger when the seller offers different quality versions of the same product. Hence, our results suggest that, when the innate durability of a product is high, the seller should offer different quality versions of the product.https://www.mdpi.com/2073-4336/11/2/22durable goodsmonopolypricingqualitydifferentiation |
| collection |
DOAJ |
| language |
English |
| format |
Article |
| sources |
DOAJ |
| author |
Basak Altan |
| spellingShingle |
Basak Altan Dynamic Durable Goods Monopoly and Market Power Games durable goods monopoly pricing quality differentiation |
| author_facet |
Basak Altan |
| author_sort |
Basak Altan |
| title |
Dynamic Durable Goods Monopoly and Market Power |
| title_short |
Dynamic Durable Goods Monopoly and Market Power |
| title_full |
Dynamic Durable Goods Monopoly and Market Power |
| title_fullStr |
Dynamic Durable Goods Monopoly and Market Power |
| title_full_unstemmed |
Dynamic Durable Goods Monopoly and Market Power |
| title_sort |
dynamic durable goods monopoly and market power |
| publisher |
MDPI AG |
| series |
Games |
| issn |
2073-4336 |
| publishDate |
2020-05-01 |
| description |
We analyze a vertically differentiated market for an imperfectly durable good served by a monopolist in an infinite-horizon, discrete-time game. Our goal is to identify the Markov perfect stationary equilibria where the seller can maintain his monopoly power. We establish that the set of parameters supporting a monopoly outcome is larger when the seller offers different quality versions of the same product. Hence, our results suggest that, when the innate durability of a product is high, the seller should offer different quality versions of the product. |
| topic |
durable goods monopoly pricing quality differentiation |
| url |
https://www.mdpi.com/2073-4336/11/2/22 |
| work_keys_str_mv |
AT basakaltan dynamicdurablegoodsmonopolyandmarketpower |
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