Durable Goods Lease Contracts and Used-Goods Market Behavior: An Experimental Study

Kay-Yut Chen and Suzhou Huang
Additional contact information
Kay-Yut Chen: Hewlett-Packard Laboratories
Suzhou Huang: Ford Motor Company

Chapter Chapter 1 in Experimental Business Research, 2005, pp 1-19 from Springer

Abstract: Abstract Leasing has become an increasingly prominent way for consumers to acquire durable goods such as automobiles. How markets respond to changes in lease contracts has enormous implications to producers such as Ford Motor Company. In this paper, an experimental model was developed to study the interaction between lease contracts that embed an option to purchase and an underlying used-goods market. Experiments with subjects playing roles of heterogeneous consumers have confirmed many salient features predicted by the theoretical model. These features include the segmentation of subjects into classes of behavior, and directional response to pricing in the used-good market to the provision in lease contracts.

Keywords: Return Rate; Strike Price; Consumer Heterogeneity; Lease Contract; Residual Quality (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-0-387-24243-9_1

Ordering information: This item can be ordered from
http://www.springer.com/9780387242439

DOI: 10.1007/0-387-24243-0_1

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().