Publication

The Impact of Sharing Markets on Product Durability

2016
Reports

Abstract

This paper studies the effects of sharing markets on the prices for new products and on product design in terms of durability. In a dynamic economy with overlapping generations, consumers take strategic purchasing decisions, anticipated by a durable-goods monopolist. Without sharing, the optimal durability increases in the production cost. In the presence of sharing, a producer prefers to limit durability for low-cost products, effectively disabling a secondary sharing market. However, all else equal, a peer-to-peer economy never decreases the incentives to provide durability.

Official source

Graph Chat

Chat with Graph Search

Ask any question about EPFL courses, lectures, exercises, research, news, etc. or try the example questions below.

DISCLAIMER: The Graph Chatbot is not programmed to provide explicit or categorical answers to your questions. Rather, it transforms your questions into API requests that are distributed across the various IT services officially administered by EPFL. Its purpose is solely to collect and recommend relevant references to content that you can explore to help you answer your questions.

2016
Reports

Abstract

Official source

Related concepts (32)

Marginal cost

In economics, the marginal cost is the change in the total cost that arises when the quantity produced is incremented, the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount. As Figure 1 shows, the marginal cost is measured in dollars per unit, whereas total cost is in dollars, and the marginal cost is the slope of the total cost, the rate at which it increases with output.

Product lifetime

Product lifetime or product lifespan is the time interval from when a product is sold to when it is discarded. Product lifetime is slightly different from service life because the latter considers only the effective time the product is used. It is also different from product economic life which refers to the point where maintaining a product is more expensive than replacing it; from product technical life which refers to the maximum period during which a product has the physical capacity to function; and from the functional life which is the time a product should last regardless of external intervention to increase its lifespan.

Cost curve

In economics, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market economy, productively efficient firms optimize their production process by minimizing cost consistent with each possible level of production, and the result is a cost curve. Profit-maximizing firms use cost curves to decide output quantities. There are various types of cost curves, all related to each other, including total and average cost curves; marginal ("for each additional unit") cost curves, which are equal to the differential of the total cost curves; and variable cost curves.

Related publications (1)

The Impact of Sharing Markets on Product Durability

Chat with Graph Search

Enriching buyers' experiences: the SmartClient approach