It has been recognized that when a durable goods manufacturer sells her output, she has an incentive to produce at a rate that will drive down the market price of her product over time. Because anticipation of declining prices makes consumers less willing to invest in owning the durable good, selling can be self-defeating for the manufacturer. If instead, the manufacturer leases her product, sh...

Using Health and Retirement Study (HRS) data, we create a new, up-todate panel dataset to investigate the impact of house price movements on the non-durable goods consumption of older households. We find that older homeowners respond asymmetrically when experiencing house price gains and house price losses. More specifically, they increase total non-durable goods expenditure when house prices a...

Many recent antitrust cases concern aftermarkets: markets for goods or services used together with durable equipment but purchased after the consumer has invested in the equipment. Examples include computer parts, software upgrades, repair manuals, and training. Durable goods manufacturers are often the dominant providers of aftermarket products. The cases involve a variety of alleged anticompe...

This paper studies a two-sector New Keynesian model that captures the hump-shaped response of non-durable and durable spending to a monetary shock when non-durable prices are sticky and durable goods are flexibly priced. Based on the estimated parameters, we show that habit formation and investment adjustment costs are not sufficient to generate the gradual response of non-durable and durable s...

© Due to the time constraint, the paper was completed in a rush and thus some of the economic interpretation may not be completely accurate. Abstract Leasing has traditionally been one of the tools that firm employs to increase market share. It is not intuitive that this strategy would actually be beneficial. It is certainly not true if we consider only perishable goods. However, there are good...

This paper solves for the profit maximising strategy of a durable–goods monopolist when incoming demand varies over time. Each period, additional consumers enter the market; these consumers can then choose whether and when to purchase. We first characterise the consumer’s utility maximisation problem and, under a monotonicity condition, show the profit maximising allocation can be solved throug...