Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94138
Authors: 
Langenberg, Tobias
Year of Publication: 
2009
Series/Report no.: 
SFB/TR 15 Discussion Paper 279
Abstract: 
This paper examines a two-period duopoly where consumers are locked-in by switching costs that they face in the second period. The paper's main focus is on the question of how the consumer lock-in affects the firms' choice of product durability. We show that firms may face a prisoners' dilemma situation in that they simultaneously choose non-durable products although they would have higher profits by producing durables. From a social welfare perspective, firms may even choose an inefficiently high level of product durability.
Subjects: 
Consumer Lock-in
Product Durability
Duopoly
JEL: 
L13
D21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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