Mergers in durable-goods industries: A re-examination of market power and welfare effects

Durable Goods and Sectoral Effects of Monetary Policy

High degree of interest sensitivity of durable goods is now a stylized fact in the literature of monetary policy. This literature, however, does not provide a clear and consensual explanation for the modalities of this stylized fact. In this paper, two independent empirical models are performed to shed more light on the cross-sectoral impacts of monetary policy. The results of first study indic...

Measuring Market Power in a Durable Goods Oligopoly: the Automobile Market

Analyzing Welfare in Related Markets: Durable Goods and Aftermarkets

The "aftermarkets" literature focuses on two important questions: (1) do durable goods manufacturers that control their aftermarkets have an incentive to charge service prices that exceed costs?; (2) how significant (in a welfare sense) is this distortion? Unlike previous work, this paper addresses the latter question by explicitly modeling firm behavior under various market structure condition...

Equilibrium in a durable goods market with lumpy adjustment

Durable goods are an important component of the business cycle. Equilibrium models of durable goods markets are made difficult by the lumpy nature of individual purchases. We show that a straight forward approximation of the distribution of durable goods holdings gives rise to a tractable equilibrium model. We analyze the case of competition as well as that of a monopoly producer. J.E.L. Classi...

Infinite-horizon optimal advertising in a market for durable goods

In this paper we analyse the optimal infinite-horizon advertising policy of a monopolist firm in a market for durable goods, based on classic models by Vidale–Wolfe (Oper. Res. 1957; 5(3):370–381) and Nerlove– Arrow (Economica 1962; 29(114):129–142). A set of necessary conditions for optimality generalizing previous results is provided for the resulting non-convex system. In addition, we establ...