IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v50y1983i4p625-637..html
   My bibliography  Save this article

Market Structure and the Durability of Goods

Author

Listed:
  • Andrew B. Abel

Abstract

This paper compares the durability of goods produced in competitive and monopolistic markets. Durability is chosen to minimize the cost of providing a given present value of flow of services over the life of the durable. As pointed out by Swan, under constant returns to scale, the cost-minimizing durability is independent of the level of output; thus competitive firms will choose the same durability as a monopolist, even though they would produce different levels of output. In this paper, we relax the assumption of constant returns to scale and derive more general conditions under which optimal durability is independent of the level of output. We also demonstrate that with a particular specification of external diseconomies of scale, the monopolist will produce goods with greater durability than would be produced by competitive firms.

Suggested Citation

  • Andrew B. Abel, 1983. "Market Structure and the Durability of Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 625-637.
    • Handle: RePEc:oup:restud:v:50:y:1983:i:4:p:625-637.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/2297765
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Feenstra, Robert C, 1995. "Exact Hedonic Price Indexes," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 634-653, November.
    2. Robert C. Feenstra, 1993. "Measuring the Welfare Effect of Quality Change: Theory and Application of Japanese Autos," NBER Working Papers 4401, National Bureau of Economic Research, Inc.
    3. Marco Runkel, 2003. "Product Durability and Extended Producer Responsibility in Solid Waste Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(2), pages 161-182, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:50:y:1983:i:4:p:625-637.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.