Inefficient sales delays by a durable-good monopoly facing a finite number of buyers

• 成果类型: Article
• 署名作者: Montez, Joao
• 署名单位: University of London; London Business School
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12025
• 发表日期: 2013
• 页码: 425-437
• 关键词: coase; WAR; durability

摘要

This article offers a new explanation for unscheduled price cuts and slow adoption of durable goods. We study a standard durable-good monopoly model with a finite number of buyers and show that this game can have multiple subgame perfect equilibria in addition to the Pacman outcomeincluding the Coase conjecture. Of particular interest is a class of equilibria where the seller first charges a high price and only lowers that price once somebut not allhigh-valuation buyers purchase. This price structure creates a war of attrition between those buyers, which delays market clearing and rationalizes unscheduled purchase and price cut dates.