The John M. Olin Center

Paper Abstract

263. Barak Y. Orbach, The Durapolist Puzzle: Market Power In Durable-Goods Markets, 9/99; subsequently published in Yale Journal on Regulation, Vol. 21, No. 1, Winter 2004, 67-119.

Abstract: This paper presents the time-inconsistency problem of the durable-goods monopolist, the durapolist. The durapolist may encounter difficulties in garnering his potential monopolistic rent, because he is likely to reduce his prices over time. To overcome this time inconsistency, over the years durapolists have developed various business strategies. I have studied the main strategies, their anticompetitive effects and the ways they were treated by the courts, lawyers and economists. In particular, the various practices of commitments to future prices, planned obsolescence, tying arrangements, and leasing are examined.

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