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The paper analyzes a durable goods monopoly problem in which multiple varieties can be sold. A robust Coase conjecture establishes that the market eventually clears, with profits exceeding static optimal market-clearing profits and converging to this lower bound in all stationary equilibria with instantaneous price revisions. Pricing need not be efficient, nor is it minimal (equal to the maximum of marginal cost and minimal value), and can lead to cross-subsidization. Conclusions nest both classical Coasian insights and modern Coasian failures. The option to scrap products does not affect results qualitatively, but delivers a novel motive for selling high cost products.

One of the most famous and outstanding formalizations of the Coase Conjecture is by Gul et al. (J Econ Theory 39(1):155–190, 1986. https://doi.org/10.1016/0022-0531(86)90024-4 ) peculiarity of their model—as well as nearly all other examinations of the Coase Conjecture, including that by Coase himself—is that it assumes that the monopolist and customers have the same discount rate. I re-examine their model, while relaxing this restriction. Gul et. al. show that, if the (common) discount rate of the monopolist and customers approaches one, then the Coase Conjecture follows. I show that one only needs the discount rate of the customers to approach one for this to be true. I also show a second result: If the customers’ discount rate is fixed at a value less than one, while the monopolist’s discount rate approaches one, then the Coase Conjecture is guaranteed not to follow.

Firms in bilateral relationships are likely to produce or procure unique products-especially when they are in durable goods industries. Consistent with the arguments of Titman and Titman and Wessels, such firms are likely to maintain lower leverage. We compile a database of firms' principal customers (those that account for at least 10% of sales or are otherwise considered important for business) from the Business Information File of Compustat and find results consistent with the predictions of this theory.

Using aggregate product search data from Amazon.com, we jointly estimate consumer information search and online demand for consumer durable goods. To estimate the demand and search primitives, we introduce an optimal sequential search process into a model of choice and treat the observed market-level product search data as aggregations of individual-level optimal search sequences. The model builds on the dynamic programming framework by Weitzman [Weitzman, M. L. 1979. Optimal search for the best alternative. Econometrica 47 (3) 641-654] and combines it with a choice model. It can accommodate highly complex demand patterns at the market level. At the individual level, the model has a number of attractive properties in estimation, including closed-form expressions for the probability distribution of alternative sets of searched goods and breaking the curse of dimensionality. Using numerical experiments, we verify the model's ability to identify the heterogeneous consumer tastes and search costs from product search data. Empirically, the model is applied to the online market for camcorders and is used to answer manufacturer questions about market structure and competition and to address policy-maker issues about the effect of selectively lowered search costs on consumer surplus outcomes. We demonstrate that the demand estimates from our search model predict the actual product sales ranks. We find that consumer search for camcorders at Amazon.com is typically limited to 10-15 choice options and that this affects estimates of own and cross elasticities. In a policy simulation, we also find that the vast majority of the households benefit from Amazon.com's product recommendations via lower search costs.

Using a large Chinese household survey data set, we investigate the effect of home value appreciation on urban household consumption. The paper identifies the causal effect of housing wealth using both Two-Stage Least Squares (2SLS) estimates and regression discontinuity designs. The research demonstrates that the housing boom in China has resulted in higher consumption and that a 10% increase in home wealth raises overall consumption by approximately 3%. The average marginal propensity to consume out of housing wealth is about 5 cents with substantial heterogeneity across household characteristics. The findings highlight the role of mortgage debts, health insurance, education and risk preference in explaining the variation in household consumption. Our results persist when we adopt different proxies for housing wealth. 利用中国家庭层面调查大数据，我们研宄房屋资产升值对城市家庭消费的影响。本文采用 两阶段最小二乘(2SLS)估计和断点回归设计方法来识别住房资产对消费的财富效应。研宄 表明，中国房地产繁荣促进了消费，住房资产每增长10%,家庭消费支出增长约为3%。住 房财富的边际消费倾向约为0.05,但不同家庭特征呈现出显著的异质性。研宄结果显示了 住房按揭贷款债务、健康保险、教育和风险偏好在解释家庭消费差异性方面的作用。我们 选择不同的住房资产代理变量进行稳健性检验，得出一致结果。

This paper analyzes the time trend of household consumption in Japan between 1981 and 2020, using microdata from the Family Income and Expenditure Survey (FIES). We examine how the trends in the levels, shares, and growth of consumption vary across categories of consumption, items, and age groups, and assess changes in consumption inequality over time. Our analysis shows that consumption inequality mildly increased, driven primarily by the trend of service consumption and a shift in the age distribution. Additionally, we estimate the life-cycle profiles of consumption and find that the age component of total consumption follows a standard hump-shaped pattern, but varies significantly across goods and service categories and item groups. Finally, using the estimated age profiles of different consumption items, we project how aggregate consumption and its composition may evolve as Japan’s population ages in the coming decades.

This study examined the socioeconomic factors influencing Mexican household consumption during the 1994 and 2010 crises. Using data from the National Survey of Household Income and Expenditure (ENIGH) from 1994 to 2012, we analyzed household expenditure elasticities for durable, semi-durable, and non-durable goods relative to income. We employed a linear regression model incorporating household head characteristics, including gender, education, and income level, to assess consumption adjustments. The results showed that during the 1994 crisis, low-income households reduced durable goods consumption less than expected. Non-durable goods consumption remained stable in both crises. Households led by women were less likely to cut spending on non-essential goods, while male-headed households with limited education adjusted consumption more sharply. These patterns suggest that external factors, such as remittances, helped sustain consumption among the poorest households. The findings emphasize the importance of understanding household resilience mechanisms during economic shocks. Further research is needed to optimize policy design and assess the social impacts of high economic integration.

This paper studies how the consumer’s anticipated regret affects the firms’ pricing decisions and profits in a duopoly market. I consider a two-period game with differentiated durable products, where an incumbent sells a basic version over two periods, and an entrant releases an improved version in period 2, of which the improved features are difficult to assess by the consumers. This ambiguity will lead to regret. This paper focuses on two types of regret: a consumer may regret purchasing in period 1 instead of purchasing in period 2 (action regret); a consumer who waited until period 2 might regret not buying in period 1 (inaction regret). The consumers can anticipate the possible regret, which will influence the consumer’s decision-making. The results show that both types of anticipated regret may increase or decrease the incumbent’s profit. In contrast, action (inaction) regret always benefits (harms) the entrant. Besides, the analysis indicates that the improved version’s quality may either strengthen or weaken the impact of regret. Moreover, this paper examines the robustness of the results under different setups.

Purpose Unlike point of purchase behavior, not much is known about how payment method impacts post-purchase behavior, especially for durable goods where user experience can last over long periods. The purpose of this paper is to link two strands of literature for the first time by uncovering systematic linkages between the payment method (upfront cash vs loan) used for purchase of durable goods and the replacement timings for the same. Design/methodology/approach The authors predict that cash purchases are more likely to have shorter replacement horizons compared to loan purchases and propose a psychological mechanism that accounts for the same. Their arguments are based on how the strength of coupling, which is the degree of psychological association between payment and consumption, depends on the payment method and differentially influences the consumption experience and consequently leads to different replacement horizons. They conduct a field study to test their predictions and find support for their model. Findings The authors find that individuals who financed their durable goods purchases using loan, expressed their intentions to replace the goods after longer period than those who financed their durable goods with cash down payment. As loan installments remind people of painful thoughts of payment, they tend to reduce the dissonance by positively evaluating both retrospective and anticipated usage experiences. This dissonance reduction mechanism eventually leads to reduced willingness to let go of the durable. Practical implications Marketers are faced with a tradeoff between increasing purchase likelihood versus ensuring long-term post-purchase satisfaction. In this paper, the authors uncover the psychological mechanisms that can explain how payment method chosen to pay for a durable can have direct effect on post-purchase consumption experiences and subsequently in the replacement intentions. This finding is crucial for marketers who are interested in planning the product line launches and other post-purchase engagement strategies such as buy-back scheme and upgrades. Social implications Understanding the psychological mechanisms that explain individual’s likelihood to replace their durable goods allows policymakers to design appropriate interventions to induce more sustainable and efficient use of durable goods in the market. While on one hand, marketers might be interested in increasing sales of their product line by inducing faster replacement of older product versions, environmentalists nudge towards the opposite. This paper provides a possible way to achieve the dual objectives. Originality/value While past research on downstream effects of payment methods on behavioral outcomes focused only on consumables, the authors focus on durable goods. Further, they identify the effect of payment method on both psychological and behavioral outcomes.

I study the problem of a durable goods monopolist who lacks commitment power and whose marginal cost of production varies stochastically over time. I show that a monopolist with stochastic costs usually serves the different types of consumers at different times and charges them different prices. When the distribution of consumer valuations is discrete, the monopolist exercises market power and there is inefficient delay. When there is a continuum of types, the monopolist cannot extract rents and the market outcome is efficient.