Non-Stationary Demand in a Durable Goods Monopoly
ISSN: 1988-088X
Año de publicación: 2006
Número: 5
Tipo: Documento de Trabajo
Otras publicaciones en: DFAE-II WP Series
Resumen
In a context where demand for the services of a durable good changes over time, and this change may be uncertain, the paper shows that social welfare may be higher when the monopolist seller can commit to any future price level she wishes than when she cannot. Moreover, the equilibrium under a monopolist with commitment power may Pareto-dominate the equilibrium under a monopolist without commitment ability. These results affect the desired regulation of a durable goods monopolist in this context.