The Ghemawat and Nalebuff (1985) exit model is extended to include an entry stage. Demand is high at the time of entry but is expected to eventually decline. It is shown that equilibrium entry decisions may be critically affected by the prospect of a future decline in demand, even when the...

We consider a durable-good monopolist that periodically introduces new models, each new model representing an improvement upon its predecessor. We show that if the monopolist is able neither to exercise planned obsolescence (i.e., artificially shorten the lift of its products) nor to give...

In this article, I analyze price competition under price inertia. After setting prices, sellers are unable to change them for a period of predetermined length, but may delay price commitments indefinitely. Although most consumers consider the firms' products to be perfect substitutes, an...