Replacement cycles, income distribution and dynamic price discrimination

Eduardo Correia de Souza and Jorge Chami Batista

Applied Economics, 2015, vol. 47, issue 31, 3292-3310

Abstract: This article analyses how income distribution, Intellectual Property Rights and other regulatory policies such as minimum quality standards determine pricing strategies in a dynamic context where a monopolist periodically introduces new generations or upgrades of a durable good. Discrimination through quality and screening in this article takes place in a context where consumers buy several versions of the durable good during their lifetime, instead of a single version as in Inderst's (2008) or Koh's (2006). It also differs from Glass (2001) in that an equilibrium may emerge in which different consumer types replace their durable generations with different frequencies. Our modelling is motivated by stylized facts from the last Brazilian POF (household budget survey).

Date: 2015
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Related works:
Working Paper: Replacement Cycles, Income Distribution, and Dynamic Price Discrimination (2014)
Working Paper: REPLACEMENT CYCLES, INCOME DISTRIBUTION, AND DYNAMIC PRICE DISCRIMINATION (2007)
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DOI: 10.1080/00036846.2015.1013616

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