A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.

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  • To investigate whether secondary markets aid or harm durable goodsmanufacturers, we build a dynamic model of durable goods oligopolywith transaction costs in the secondary market. Calibrating modelparameters using data from the US automobile industry, we find thenet effect of opening the secondary market is to decrease new carmanufacturers' profits by 35 percent. Counterfactual scenarios inwhich the size of the used good stock decreases, such as when productsbecome less durable, when the number of firms decreases, or whenfirms can commit to future production levels, increase the profitabilityof opening the secondary market.

Last update from database: 6/12/24, 11:00 PM (AEST)

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