Obsolescence of Durable Goods and Optimal Purchase Timing

Ennio Stacchetti and Dmitriy Stolyarov
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Ennio Stacchetti: New York University

Review of Economic Dynamics, 2015, vol. 18, issue 4, 752-773

Abstract: We study a model with a durable good subject to periodic obsolescence and analytically characterize the optimal purchasing policy. The key result is that consumers optimally synchronize new purchases with the innovation cycle. The model simultaneously explains coordinated adoption without invoking network effects and provides a theoretical underpinning for a diffusion curve that features a temporary adoption slowdown. (Copyright: Elsevier)

Keywords: Obsolescence; Durable goods; Technology adoption (search for similar items in EconPapers)
JEL-codes: E22 O31 O33 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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DOI: 10.1016/j.red.2015.07.002

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