Esteban, Susanna and Shum, Matthew (2007) Durable-goods oligopoly with secondary markets: the case of automobiles. RAND Journal of Economics, 38 (2). pp. 332-354. ISSN 0741-6261. doi:10.1111/j.1756-2171.2007.tb00071.x. https://resolver.caltech.edu/CaltechAUTHORS:ESTrje07
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Abstract
We study the effects of durability and secondary markets on equilibrium firm behavior in the car market. We construct a dynamic oligopoly model of a differentiated product market to incorporate the equilibrium production dynamics that arise from the durability of the goods and their active trade in secondary markets. We derive an econometric model and estimate its parameters using data from the automobile industry over a 20-year period. Our estimates are used to provide a measure of the competitive importance of the secondary market.
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| Additional Information: | © RAND 2007. We thank the Editor and two anonymous referees for detailed comments. We thank Steve Berry, Eric Bond, Jean-Pierre Dubé, Alessandro Gavazza, Joe Harrington, Hugo Hopenhayn, Ozgur Kibris, Alessandro Lizzeri, Sumon Majumdar, Ariel Pakes, Mark Roberts, Marc Rysman, Shannon Seitz, Nadia Soboleva, Jim Tybout and participants at many universities and conferences. We thank Jian Hong, Sunghwan Kim, Andy Kotikula and Yi Lee for remarkable research assistance. | |||||||||
| Subject Keywords: | STATIONARY EQUILIBRIUM; PLANNED OBSOLESCENCE; ADVERSE SELECTION; MONOPOLY; MODEL; PURCHASES; BEHAVIOR; LEMONS; STOCKS | |||||||||
| Issue or Number: | 2 | |||||||||
| DOI: | 10.1111/j.1756-2171.2007.tb00071.x | |||||||||
| Record Number: | CaltechAUTHORS:ESTrje07 | |||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:ESTrje07 | |||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | |||||||||
| ID Code: | 12056 | |||||||||
| Collection: | CaltechAUTHORS | |||||||||
| Deposited By: | Lindsay Cleary | |||||||||
| Deposited On: | 22 Oct 2008 18:23 | |||||||||
| Last Modified: | 08 Nov 2021 22:25 |
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