Can more perishable products be welfare-improving?

Pak-Sing Choi () and Felix Munoz-Garcia
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Pak-Sing Choi: National Central University

Economics Bulletin, 2023, vol. 43, issue 2, 1088 - 1097

Abstract: We examine how product perishability affects equilibrium behavior in the Stackelberg model, including firms' output decisions, profits, and welfare. We show that while both firms increase their production levels, aggregate sales decrease in equilibrium due to perishability. Welfare can, however, increase with more perishable products if firms are sufficiently cost symmetric.

Keywords: Stackelberg competition; Perishability; Output advantage; First-mover's advantage; Welfare effects. (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2023-06-30
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