In spite of the fact that many durable products are sold through dealers, the literature has largely ignored the issue of how product durability affects the interactions between a manufacturer and her dealer(s). We seek to fill this gap by considering a durable goods manufacturer that uses an independent dealer(s) to get her product to consumers. If the manufacturer sells her product to the dea...

Green product companies usually convey performance in either ambiguous or precise ways. Many studies have been conducted on the and information presentation of traditional products, but few examined which kind (ambiguous vs. precise) is better for presenting green products. This article three experiments with 484 participants to examine influence products consumers’ purchase intention. Results ...

This paper provides a simple dynamic optimization model of durable goods inventories. Closed-form solutions are derived in a general equilibrium environment with imperfect information and serially correlated shocks. The model is then applied to scrutinize some popular conjectures regarding the causes of the volatility reduction of GDP since 1984. JEL Classification: E22, E23, E32.

By using nonparametric and panel data econometrics, this paper re-assesses the effect of both the current level of economic activity and of future expected demand on the dynamics of the price mark-up over marginal cost in US manufacturing industries from 1958 to 1996. Consistently with previous results, the current level of economic activity has a negative impact on the mark-up and expectations...

This paper shows equilibrium existence for an infinite–horizon exchange economy with incomplete markets of real assets when default is allowed. Borrowers are required to constitute collateral in terms of durable goods and face credit constraints that depend on their past default. When credit constraints are inelastic, Ponzi schemes are ruled out and an equilibrium exists. JEL Classification: D5...

We use the results of three large-scale field experiments to investigate how the depth of a current price promotion affects future purchasing. While most previous studies have focused on packaged goods sold in grocery stores, we consider durable goods sold through a direct mail catalog. The findings reveal different effects for firsttime and established customers. Deeper price discounts in the ...

People exaggerate the degree to which their future tastes will resemble their current tastes. We present evidence from a variety of domains which demonstrates the prevalence of such projection bias, develop a formal model of it, and use this model to demonstrate its importance in economic environments. Projection bias leads people to overvalue reference-dependent goods and magni...es the endowm...

In the operations management literature, decentralization is often associated with the double marginalization problem. However, in this chapter, we review several existing papers that demonstrate how decentralization can be beneficial to supply chain performance. A key premise in this literature is that consumers are strategic: They rationally anticipate and respond to future market conditions....

Unit-root and variance-ratio tests are used to examine the trend properties and degree of persistence of industrial production in U.S. industries and comparable aggregates during the post World War I1 period. The evidence from unit-root tests suggests that less than one-half of these industries have output which may be characterized as a random walk. The variance-ratio test results generally su...

This paper studies dynamic price competition between two firms selling differentiated durable goods to two buyers whose valuations of the two goods depend on their own private type as well as that of the other buyer. We construct an equilibrium based on the key observation that the expected price of either good in period 2 is the same as its price in period 1 on and off the path of play. We sho...