Durable Market Research Articles

Intertemporal Price Discrimination in Frictionless Durable Goods Monopolies

I show that small differences in quality and production costs between durables and non‐durables in a product line allow a durable goods monopolist to intertemporally price discriminate even with continuous trading. In particular, a monopolist would want to both sell and rent out a durable to achieve price discrimination. This incentive to price discriminate simultaneously creates inefficient delay in the sale of the durable good, a finite trading period and long run efficiency of the market. The Coase conjecture fails because the non‐durable good acts as an outside option that guarantees a minimum profit in the market for durables.

The process of reaching an agreement in second-hand markets for consumer durables

In this paper, bargaining processes in the second-hand market for consumer durables will be investigated. The principal aim of this study is to empirically estimate the predicted negotiated price, based on the reservation prices and the corresponding probabilities of reaching an agreement as perceived by the potential buyers and sellers. To predict the outcome of the bargaining process, we distinguish two curves: the buyers' curve, which shows the buyers' perceived probabilities of prices acceptable to the seller(s) and the sellers' curve, which does likewise for the sellers. The intersection point of these two curves indicates the predicted price at which the joint probability of reaching an agreement is at a maximum. Alternatively, a predicted price has been computed from the intersection of the cumulative distributions of buyers' and sellers' reservation prices. Finally, the predicted prices of different types of second-hand goods are compared to the prices realized on the market, called observed prices.

The Asian Consumer Durable Market: With Special Reference to China

The first part of this article investigates the overall size and growth potential of the Asian consumer market. The second part will concentrate on the consumer durable market, which is likely to out-perform the general consumer market, of individual Asian economies. Some of the durable markets are found to have strong potential while others are not that promis ing. The last part is a detailed study of individual consumer durable markets in China. China was chosen because of its huge market potential.

Integration, Complementary Products, and Variety

This paper examines the incentives for integration when the market for consumer durables (hardware) is oligopolistic and the market for complementary services (software) is monopolistically competitive. We find that the equilibrium industry structure will depend on the magnitude of the fixed costs of software development. If the software development costs are relatively large, the equilibrium industry structure is unintegrated, that is, neither hardware firm integrates; if the software development costs are relatively small, the equilibrium industry structure is integrated, that is, both hardware firms integrate. Under the integrated industry structure, hardware profits are lower, less varieties are provided, and hardware prices are lower than under the unintegrated industry structure. The game has a prisoners' dilemma structure when the software development costs are relatively small because of a foreclosure effect. Strategically increasing the number of software varieties provides an avenue for an integrated hardware firm to increase its market share and profits by reducing the number of software varieties available for an unintegrated rival technology. Although consumer surplus is higher under an integrated industry structure, the total surplus associated with the unintegrated industry structure exceeds that of the integrated industry structure.

The Coexistence of Large and Small Firms: A Study of the Italian Mechanical Industries

Introduction, 116. — I. The structure of the Italian mechanical industries, 117. — II. The market for consumers' durables, 118. — III. Subcontracting and peak demand orders, 122. — IV. Growth possibility of large and small firms, 124. — V. The availability of financing, 127. — VI. The vulnerability of small firms, 129. — VII. Small firms: an evil or a blessing? 130.