Hahn, Jong-Hee - EconWPA - 2002
A durable-goods monopolist may use quality degradation as a commitment not to lower price in the future. The … introduction of damaged goods expedites low-valuation consumers’ future demands, and helps the firm to mitigate the Coasian time …-consistency problem. In such a case, damaged goods are more likely to be observed relative to the static setting where only the price …