Planned obsolescence and monopoly undersupply

Chun-Hui Miao

Information Economics and Policy, 2011, vol. 23, issue 1, 51-58

Abstract: This paper examines the welfare implications of planned obsolescence in situations where the traditional monopoly undersupply exists. We find that the monopolist's introduction of incompatibility between successive generations of products alleviates the monopoly undersupply problem and may therefore generate higher social welfare than compatibility. Paradoxically, the stronger the network effects, the more likely welfare will increase as a result of incompatibility. Our result also extends to two-sided markets characterized by indirect network effects.

Keywords: Compatibility; Monopoly; undersupply; Planned; obsolescence (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167-6245(10)00030-2
Full text for ScienceDirect subscribers only

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:eee:iepoli:v:23:y:2011:i:1:p:51-58

Access Statistics for this article

Information Economics and Policy is currently edited by D. Waterman

More articles in Information Economics and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().