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"Planned antiobsolescence" occurs when consumers engage in maintenance

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  • Kinokuni, Hiroshi
  • Ohkawa, Takao
  • Okamura, Makoto

Abstract

This paper examines whether the built-in durability chosen by a durable-good monopolist and the actual durability associated with consumer maintenance are excessive or insufficient. Our research indicates that only in situations where both the consumer maintenance market and the secondhand market exist can the monopolist select a socially excessive durability level: that is, planned antiobsolescence requires both markets. However, overinvestment in built-in durability does not necessarily lead to a socially excessive level of actual durability. We also show that the existence of maintenance may enhance built-in durability, even though maintenance activity can partially recover the depreciation in durability.

Suggested Citation

  • Kinokuni, Hiroshi & Ohkawa, Takao & Okamura, Makoto, 2010. ""Planned antiobsolescence" occurs when consumers engage in maintenance," International Journal of Industrial Organization, Elsevier, vol. 28(5), pages 441-450, September.
    • Handle: RePEc:eee:indorg:v:28:y:2010:i:5:p:441-450
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    References listed on IDEAS

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    1. Hodaka Morita & Michael Waldman, 2004. "Durable Goods, Monopoly Maintenance, and Time Inconsistency," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(2), pages 273-302, June.
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    Cited by:

    1. Kinokuni, Hiroshi & Ohori, Shuichi & Tomoda, Yasunobu, 2021. "Advance disposal fee vs. disposal fee: A monopolistic producer’s durability choice model," Resource and Energy Economics, Elsevier, vol. 65(C).
    2. Gregory E. Goering, 2012. "Taxation and Durable-Goods Monopoly: Does a Current Tax Influence Firm Behavior?," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 20-28, August.
    3. Hiroshi Kinokuni & Shuichi Ohori & Yasunobu Tomoda, 2019. "Optimal Waste Disposal Fees When Product Durability is Endogenous: Accounting for Planned Obsolescence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 33-50, May.

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