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This paper investigates the role of product upgrades and consumer switching costs in the tying of complementary products. Previous analyses of tying have found that a monopolist of one product cannot increase its profits and reduce social welfare by tying and monopolizing a complementary product...
Persistent link: https://www.econbiz.de/10013244120
This paper investigates how the tying of complementary products can be used to preserve and extend monopoly positions …. We first show how a firm that is a monopolist of a product in the current period can use tying to preserve its monopoly … monopoly position into a newly emerging market. The analysis focuses on the importance of entry costs and network externalities …
Persistent link: https://www.econbiz.de/10013244368
This paper examines the role of lumpy consumer durables and market power in generating endogenous cycles which seem to be consistent with the facts. When goods are durable, past consumption choices determine the current market size which consists of consumers who have not purchased the good...
Persistent link: https://www.econbiz.de/10013244099
Previous work has claimed that monopoly power facilitates the provision of credit, since monopolists are better able to … creditworthiness, monopoly power may reduce credit provision because hold up problems ex post will deter borrowers from investing in … establishing creditworthiness. Empirically, we examine the relationship between monopoly power and credit provision, using data on …
Persistent link: https://www.econbiz.de/10013226905
When consumers exhibit present bias and are time-inconsistent, the standard solution to market failures caused by externalities--Pigouvian pricing--is suboptimal. I investigate policies aimed at externalities for time-inconsistent consumers. Welfare-maximizing policy in this case includes an...
Persistent link: https://www.econbiz.de/10013124551
We present a survey design that generalizes static conjoint experiments to elicit inter-temporal adoption decisions for durable goods. We show that consumers' utility and discount functions in a dynamic discrete choice model are jointly identified using data generated by this specific design. In...
Persistent link: https://www.econbiz.de/10013100670
Dynamically and statically optimal Pigouvian subsidies on durables will differ in a growing economy. For durables with positive externalities, such as sanitation, statically optimal subsidies will typically grow. However, in a dynamic game, governments can most cheaply induce optimal purchasing...
Persistent link: https://www.econbiz.de/10013000512
Data for OECD countries document: 1. imports and exports are about three times as volatile as GDP; 2. imports and exports are pro-cyclical, and positively correlated with each other; 3. net exports are counter-cyclical. Standard models fail to replicate the behavior of imports and exports,...
Persistent link: https://www.econbiz.de/10012772731
Using loan-level data on millions of used-car transactions across hundreds of lenders, we study the consumer response to exogenous variation in credit terms. Borrowers offered shorter maturity decrease expenditures enough to offset 60-90% of the monthly payment increase. Most of this is driven...
Persistent link: https://www.econbiz.de/10012916888
An undesirable feature of Akerlof style models of adverse selection is that ownership of" used cars is independent of preferences and is therefore ad hoc. We present a dynamic model" that incorporates the market for new goods. Consumers self-select into buying new or used" goods making ownership...
Persistent link: https://www.econbiz.de/10013224866