Design Innovation and Fashion Cycles

Wolfgang Pesendorfer ()

American Economic Review, 1995, vol. 85, issue 4, 771-92

Abstract: A model of fashion cycles is developed in which designs are used as a signaling device in a 'dating game.' A monopolist periodically creates a new design. Over time the price of the design falls as it spreads across the population. Once sufficiently many consumers own the design it is profitable to create a new design and thereby render the old design obsolete. This paper gives conditions under which all consumers would be better-off by banning the use of fashion. Competition among designers may lead to less frequent changes in fashion and to higher prices than monopoly. Copyright 1995 by American Economic Association.

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (162)

Downloads: (external link)
http://links.jstor.org/sici?sici=0002-8282%2819950 ... O%3B2-Y&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Design Innovation and Fashion Cycles (1993)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:85:y:1995:i:4:p:771-92

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().