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Tying , Compatibility and Planned Obsolescence
| Content Provider | Semantic Scholar |
|---|---|
| Author | Miao, Chun-Hui |
| Copyright Year | 2013 |
| Abstract | According to the hypothesis of planned obsolescence, a durable goods monopolist without commitment power has an excessive incentive to introduce new products that make old units obsolete, and this reduces its overall pro tability. In this paper, I reconsider the above hypothesis by examining the role of competition in a monopolists upgrade decision. I nd that, when a system add-on is competitively supplied, a monopolist chooses to tie the add-on to a new system that is only backward compatible, even if a commitment of not introducing the new system is available and socially optimal. Tying facilitates a price squeeze. (JEL D40, L00, L40) |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://mpra.ub.uni-muenchen.de/14767/2/MPRA_paper_14767.pdf |
| Alternate Webpage(s) | https://mpra.ub.uni-muenchen.de/16883/1/MPRA_paper_16883.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |