Hahn, Jong-Hee - In: RAND Journal of Economics 37 (2006) 1, pp. 121-133
I analyze a durable-goods monopolistÕs incentives to introduce a damaged good (a stripped down version of the original good) in an infinite-horizon framework. The damaged good helps the monopolist to mitigate the Coasian time-inconsistency problem. However, it may lead to a welfare reduction:...