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

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), pp. 346-364.

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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.

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Published date: 1996


Local EPrints ID: 32969
ISSN: 0741-6261
PURE UUID: 663656ab-4ee1-43e6-a30a-a3fef0c04b1e

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Date deposited: 28 Jun 2007
Last modified: 17 Jul 2017 15:54

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

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