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Dynamic Durable Goods Monopoly and Market Power

Author

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  • Basak Altan

    (Department of Economics, Ozyegin University, 34794 Istanbul, Turkey)

Abstract

We analyze a vertically differentiated market for an imperfectly durable good served by a monopolist in an infinite-horizon, discrete-time game. Our goal is to identify the Markov perfect stationary equilibria where the seller can maintain his monopoly power. We establish that the set of parameters supporting a monopoly outcome is larger when the seller offers different quality versions of the same product. Hence, our results suggest that, when the innate durability of a product is high, the seller should offer different quality versions of the product.

Suggested Citation

  • Basak Altan, 2020. "Dynamic Durable Goods Monopoly and Market Power," Games, MDPI, vol. 11(2), pages 1-14, May.
    • Handle: RePEc:gam:jgames:v:11:y:2020:i:2:p:22-:d:359402
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    References listed on IDEAS

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    Cited by:

    1. Amit Gayer, 2023. "Duopoly and Endogenous Single Product Quality Strategies," Games, MDPI, vol. 14(4), pages 1-11, August.

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