Economics Dictionary of ArgumentsHome
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| Durable goods: Durable goods in economics are products designed to last for an extended period. Examples include cars, appliances, and electronics. The opposite term is consumer goods. See also Consumer Goods, Consumption, Goods, Exchange, Service._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Economic Theories on Durable Goods - Dictionary of Arguments
Kiesling I 51 Durable goods/economic theories/Kiesling: The Coase Conjecture has generated a large literature that formalizes the theory and applies it to durable goods markets. >Durable goods/Coase, >Marginal cost controversy/Coase, >Monopolies/Coase. Much of this work is gametheoretic in nature, which makes sense - the core of Coase’s logic is backward induction, or reasoning backward to determine a sequence of optimal actions. The intertemporal strategic interaction among the monopolist and its future selves is a good example of how the monopoly maximizes its profits at each separate decision stage, working backward from the end to today, to determine the sequence of optimal pricing decisions over time. Deneckere and Liang (2008)(1) and the research they cite provide good examples of this literature expanding on the Coase Conjecture. In both the decreasing-cost industry question and the durable goods question, Coase’s analysis of the implications of monopoly deepened our understanding of those implications. The static monopoly model, with its naïve presumption that a monopolist would charge a high price, did not explain the actual experience of pricing observed in these markets. Coase’s work helps us understand why, and has led to further research to deepen and extend that understanding. 1. Raymond Deneckere & Meng‐Yu Liang, 2008. "Imperfect durability and the Coase conjecture," RAND Journal of Economics, RAND Corporation, vol. 39(1), pages 1-19, March._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Economic Theories Kiesling I L. Lynne Kiesling The Essential Ronald Coase Vancouver: Fraser Institute. 2021 |
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