Durable Services Monopolists Do Better Than Durable Goods Monopolists.

The authors consider a monopolist who can commit to a price path when selling a good for which individual consumers demand at most one unit. Only if the monopolist can also commit to destroying unpurchased stock and the timing of stock release, can she earn more than a static monopolist. This additional commitment power has empirical revelance for a wide range of goods that the authors term 'durable services.' The inability to store output facilitates price discrimination by a durable services monopolist by permitting the credible threat of rationing. The authors detail sufficient conditions for a durable services monopolist to produce more than a static or durable goods monopolist produces.