Leasing versus Selling and Firm Efficiency in Oligopoly

We examine sales and leasing of a durable good in an asymmetric duopoly. We find that inefficient firms tend to lease more. While the low cost firm sells more than the high cost firm, the high cost firm leases more. Further, an increase in unit costs implies a higher ratio of leased units to sales. This pattern is reversed when the unit cost decreases significantly over time.

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Year of publication:	1999
Authors:	Saggi, Kamal ; Vettas, Nikolaos
Institutions:	Duke University, Department of Economics

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Published in ECONOMICS LETTERS, Vol. 66, 2000, pages 361-368 Number 99-07
Classification:	L13 - Oligopoly and Other Imperfect Markets ; D43 - Oligopoly and Other Forms of Market Imperfection
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005114010