The University of Southampton
University of Southampton Institutional Repository

The optimal suppression of a low-cost technology by a durable-good monopoly

The optimal suppression of a low-cost technology by a durable-good monopoly
The optimal suppression of a low-cost technology by a durable-good monopoly
If a durable-good monopoly can use either of two technologies whose properties are known to consumers, the monopoly uses only the technology with the lowest average cost at low levels of production. If consumers know only about technologies in use, the monopoly may use an inferior technology initially to increase its profits, keeping the new, efficient technology secret and switching later. Thus, in either case, an inferior technology may be used; however, switching between technologies occurs only if consumers are not fully informed about both technologies.
0741-6261
346-364
Karp, L.
832e565b-4cb5-486e-847d-9dec6c80d39c
Perloff, J.M.
658df26f-0e06-4edd-ae1c-788c6876d116
Karp, L.
832e565b-4cb5-486e-847d-9dec6c80d39c
Perloff, J.M.
658df26f-0e06-4edd-ae1c-788c6876d116

Karp, L. and Perloff, J.M. (1996) The optimal suppression of a low-cost technology by a durable-good monopoly. The Rand Journal of Economics, 27 (2), 346-364.

Record type: Article

Abstract

If a durable-good monopoly can use either of two technologies whose properties are known to consumers, the monopoly uses only the technology with the lowest average cost at low levels of production. If consumers know only about technologies in use, the monopoly may use an inferior technology initially to increase its profits, keeping the new, efficient technology secret and switching later. Thus, in either case, an inferior technology may be used; however, switching between technologies occurs only if consumers are not fully informed about both technologies.

This record has no associated files available for download.

More information

Published date: 1996

Identifiers

Local EPrints ID: 32969
URI: http://eprints.soton.ac.uk/id/eprint/32969
ISSN: 0741-6261
PURE UUID: 663656ab-4ee1-43e6-a30a-a3fef0c04b1e

Catalogue record

Date deposited: 28 Jun 2007
Last modified: 08 Jan 2022 09:56

Export record

Contributors

Author: L. Karp
Author: J.M. Perloff

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×