High Price Strategy and Quality Signalling

Atsuo Utaka

The Japanese Economic Review, 2015, vol. 66, issue 3, 408-420

Abstract: type="main">

I investigate a high price strategy by a durable-goods producer for signalling the high quality of goods. It is assumed that two types of monopolists exist: high-quality and low-quality. The monopolist's type is assumed to be unknown to consumers in the first period. Before the beginning of the second period, a product reputation established in the past period enables consumers to recognize the real type of the monopolist. I show that there occurs a signalling equilibrium where the high-quality type monopolist uses a high price strategy. An interaction between the new and old products peculiar to the durable-goods markets plays an important role in the pricing strategy.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1111/jere.12054 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:bla:jecrev:v:66:y:2015:i:3:p:408-420

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1352-4739

Access Statistics for this article

The Japanese Economic Review is currently edited by Akira Okada

More articles in The Japanese Economic Review from Japanese Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().