Obsolescence of durable goods and optimal purchase timing

Ennio Stacchetti; Dmitriy Stolyarov

doi:10.1016/j.red.2015.07.002

Obsolescence of durable goods and optimal purchase timing

Ennio Stacchetti, Dmitriy Stolyarov

Research output: Contribution to journal › Article › peer-review

Abstract

We study a model with a durable good subject to periodic obsolescence and analytically characterize the optimal purchasing policy. The key result is that consumers optimally synchronize new purchases with the innovation cycle. The model simultaneously explains coordinated adoption without invoking network effects and provides a theoretical underpinning for a diffusion curve that features a temporary adoption slowdown.

Original language	English (US)
Pages (from-to)	752-773
Number of pages	22
Journal	Review of Economic Dynamics
Volume	18
Issue number	4
DOIs	https://doi.org/10.1016/j.red.2015.07.002
State	Published - Oct 2015

Keywords

Durable goods
Obsolescence
Technology adoption

ASJC Scopus subject areas

Economics and Econometrics

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10.1016/j.red.2015.07.002

Cite this

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title = "Obsolescence of durable goods and optimal purchase timing",

abstract = "We study a model with a durable good subject to periodic obsolescence and analytically characterize the optimal purchasing policy. The key result is that consumers optimally synchronize new purchases with the innovation cycle. The model simultaneously explains coordinated adoption without invoking network effects and provides a theoretical underpinning for a diffusion curve that features a temporary adoption slowdown.",

keywords = "Durable goods, Obsolescence, Technology adoption",

author = "Ennio Stacchetti and Dmitriy Stolyarov",

note = "Publisher Copyright: {\textcopyright} 2015 Elsevier Inc.",

year = "2015",

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AB - We study a model with a durable good subject to periodic obsolescence and analytically characterize the optimal purchasing policy. The key result is that consumers optimally synchronize new purchases with the innovation cycle. The model simultaneously explains coordinated adoption without invoking network effects and provides a theoretical underpinning for a diffusion curve that features a temporary adoption slowdown.

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KW - Technology adoption

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Obsolescence of durable goods and optimal purchase timing

Abstract

Keywords

ASJC Scopus subject areas

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