Upgrades, tradeins, and buybacks

Drew Fudenberg, Jean Tirole

    Research output: Contribution to journalArticlepeer-review

    178 Scopus citations

    Abstract

    We study monopoly pricing of overlapping generations of a durable good. We consider two sorts of goods: those with an active secondhand market and anonymous consumers, such as textbooks, and those with no secondhand market and consumers who can prove that they purchased the old good to qualify for a discount on the new one, such as software. In the first case we show that the monopolist may choose to either produce or repurchase the old good once the new one becomes available. In the latter case we determine when the monopolist chooses to offer upgrade discounts.

    Original languageEnglish (US)
    Pages (from-to)235-258
    Number of pages24
    JournalRAND Journal of Economics
    Volume29
    Issue number2
    DOIs
    StatePublished - 1998

    ASJC Scopus subject areas

    • Economics and Econometrics

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