Pricing for a Durable-Goods Monopolist Under Rapid Sequential Innovation Journal Article uri icon



  • A durable-goods monopolist who will be introducing new and improved versions of his product must decide how to price his products, keeping in mind the relative attractiveness of the current and future products. Dhebar (1994) has shown that if technology is changing too quickly and the producer cannot credibly commit to future prices and quality, then no equilibrium strategy exists. That is, there is no credible strategy for the future product that the producer can commit to in the first period. We show that an equilibrium pricing strategy exists if the monopolist does not offer upgrade pricing, that is, special pricing to consumers who have bought an earlier version. The author shows the possible purchase patterns in equilibrium and derives the optimal pricing strategy.

publication date

  • November 1, 2001

has restriction

  • closed

Date in CU Experts

  • June 13, 2014 10:42 AM

Full Author List

  • Kornish LJ

author count

  • 1

Other Profiles

International Standard Serial Number (ISSN)

  • 0025-1909

Electronic International Standard Serial Number (EISSN)

  • 1526-5501

Additional Document Info

start page

  • 1552

end page

  • 1561


  • 47


  • 11