We show that when it takes time for a durable goods monopolist to make its high-end new technology accessible to low-end market (the trickle-down technology constraint), the monopolist's high-end product might have a higher-than-optimum quality. This result differs from conventional screening...

New technology is usually expensive and it takes time for manufacturers to make the technology more accessible. In the stereo industry, the first Super Audio Compact Disk (SACD) player made by Sony, SCD-1, sold for $5,000 in 1999; in 2002 the cheapest of Sony's new SACD players, SCD-CE775, had a...