The point of this paper is that if output is durable then optimal behavior of a supplier is characterized by production smoothing. Durability of goods (such as capital) has opposite effects on the supply of the goods. Higher durability on the one hand raises the variability of investment demand for the goods by lowering the user’s cost, which tends to raise the variability of supply; on the oth...

In this paper we examine the relationship between advertising spending and perceived product quality. The questions we ask are: Does a product's advertising spending in ̄uence consumers' perceptions of its quality? If so, does the effect remain even after accounting for objective quality, price and market share? Does knowledge about objective quality, from Consumer Reports or usage experience, a...

An empirically meaningful theory of dynamic games has to incorporate real-life phenomena. Durable strategies, which effects last for a period time, are prevalent in situations. Revenue generating investments, toxic waste disposal and purchase durable goods common examples strategies. This paper first provides review on durable-strategies game theory. A practically relevant advancement - random ...

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this paper presents a theoretical model in order to determine tile expected rate of durable good`s supply over time. the social plaliner maximizes tile sum of the discount ed net benefit. subject to the stochastic fluctuation in the stock of durable goods. it turns out that a social planner increases the expected rate of supply since uncertainty increases the user's loss from the view poin...

Consumption is the principal feature of Iran’s Gross National Production. Therefore, recognizing of factors that influence it is quite crucial. This article, investigates habit formation, durability, relative risk aversion and intertemporal substitution in consumption expenditures of Iranian households. For empirical study, at first, we constructed two weighted portfolio of the main assets re...

We develop a model to study the impact of changes in price or quality sensitivity on the firm as it introduces multiple generations of a durable product where unit costs are a convex function of quality. We incorporate the psychological processes of sensitization and habituation into a model of discretionary purchasing of replacement products motivated by past experience. When price sensitivity...