A Theory of Finitely Durable Goods Monopoly with Used-Goods Market and Transaction Costs
Durable Goods, Transaction Costs, Leasing and Selling, Intertemporal Price Discrimination, Markov Perfect Equilibrium
We construct a dynamic game to model a monopoly of finitely durable goods. The solution concept is Markov-perfect equilibria with general equilibria embedded in every time period. Our model is flexible enough to simultaneously explain or accommodate many commonly observ...