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Planned Obsolescence as an Engine of Technological Progress

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  • Fishman, Arthur
  • Gandal, Neil
  • Shy, Oz

Abstract

Critics of capitalism contend that many products are designed to have uneconomically short lives, with the intention of forcing consumers to repurchase too frequently. This phenomenon is commonly referred to as 'planned obsolescence.'In this paper, the authors show that a competitive market may generate too much durability in equilibrium. In particular, they show that planned obsolescence may be a necessary condition for the achievement of technological progress and that a pattern of rapidly deteriorating products and fast innovation may be preferred to long-lasting products and slow innovation. Copyright 1993 by Blackwell Publishing Ltd.

Suggested Citation

  • Fishman, Arthur & Gandal, Neil & Shy, Oz, 1993. "Planned Obsolescence as an Engine of Technological Progress," Journal of Industrial Economics, Wiley Blackwell, vol. 41(4), pages 361-370, December.
    • Handle: RePEc:bla:jindec:v:41:y:1993:i:4:p:361-70
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    References listed on IDEAS

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    1. Gul, Faruk & Sonnenschein, Hugo & Wilson, Robert, 1986. "Foundations of dynamic monopoly and the coase conjecture," Journal of Economic Theory, Elsevier, vol. 39(1), pages 155-190, June.
    2. Bulow, Jeremy I, 1982. "Durable-Goods Monopolists," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 314-332, April.
    3. Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-149, April.
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    Cited by:

    1. Galiani, Sebastian & Jaitman, Laura & Weinschelbaum, Federico, 2020. "Crime and durable goods," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 146-163.
    2. Franses, Ph.H.B.F. & Hernández-Mireles, C., 2006. "When Should Nintendo Launch its Wii? Insights From a Bivariate Successive Generation Model," ERIM Report Series Research in Management ERS-2006-032-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    3. Amankwah-Amoah, Joseph, 2017. "Integrated vs. add-on: A multidimensional conceptualisation of technology obsolescence," MPRA Paper 86353, University Library of Munich, Germany.
    4. Dwijen Rangnekar, 2002. "R&D appropriability and planned obsolescence: empirical evidence from wheat breeding in the UK (1960--1995)," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(5), pages 1011-1029, November.
    5. Andrew M. King & Stuart C. Burgess & Winnie Ijomah & Chris A. McMahon, 2006. "Reducing waste: repair, recondition, remanufacture or recycle?," Sustainable Development, John Wiley & Sons, Ltd., vol. 14(4), pages 257-267.
    6. Amankwah-Amoah, Joseph, 2017. "Integrated vs. add-on: A multidimensional conceptualisation of technology obsolescence," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 299-307.
    7. Il-Horn Hann & Byungwan Koh & Marius F. Niculescu, 2016. "The Double-Edged Sword of Backward Compatibility: The Adoption of Multigenerational Platforms in the Presence of Intergenerational Services," Information Systems Research, INFORMS, vol. 27(1), pages 112-130, March.
    8. Langenberg, Tobias, 2009. "Product Durability in Markets with Consumer Lock-in," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 279, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    9. Qiu_Hong Wang & Kai-Lung Hui, 2005. "Technology Timing and Pricing In the Presence of an Installed Base," Industrial Organization 0512013, University Library of Munich, Germany.
    10. Tarek Selim, 2006. "On Equilibrium Number of Firms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(4), pages 505-506, December.
    11. Chihmao Hsieh, 2011. "Explicitly searching for useful inventions: dynamic relatedness and the costs of connecting versus synthesizing," Scientometrics, Springer;Akadémiai Kiadó, vol. 86(2), pages 381-404, February.
    12. Autores varios, 2017. "Aproximaciones Jurídicas a la Obsolescencia Programada," Books, Universidad Externado de Colombia, Facultad de Derecho, number 912.
    13. Moustafa, Khaled, 2024. "Actions to mitigate climate change," OSF Preprints cmyeb_v1, Center for Open Science.
    14. Kuppelwieser, Volker G. & Klaus, Phil & Manthiou, Aikaterini & Boujena, Othman, 2019. "Consumer responses to planned obsolescence," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 157-165.

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