Dynamic durable goods monopoly and market power
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Author
Type :
Article
Publication Status :
Published
Access :
openAccess
Abstract
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.
Source :
Games
Date :
2020-06
Volume :
11
Issue :
2
Publisher :
MDPI
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