AuthorKim, Young Chan.
Committee ChairReynolds, Stanley
MetadataShow full item record
PublisherThe University of Arizona.
RightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
AbstractThis dissertation is concerned with strategic decision processes in markets where products are both durable and differentiated in quality. Thus, a commodity is differentiated in a two dimensional space (a) its consumption time location, and (b) its quality characteristics. Consumers "self-select" a product among various differentiated products. There exists a one-to-one correspondence between a consumer group and a product with a certain quality in a certain period. A monopolist seller, a monopolist lessor, and a sequential entry duopoly seller market are studied in the framework of a two-period, two-quality model. When product diversification is feasible, the monopoly power of the seller is greatly increased. A seller adopts strategic quality introduction sequence so that the amount of competition from the second-hand market is endogenously selected by the seller. Hence, a seller is able to discriminate among consumers in both intertemporal and contemporaneous fashion. Equilibria are sensitive to the speed of technological advancement. If technology develops slowly, a seller adopts a strategic quality introduction sequence such that it introduces high quality first and low quality later, so that the creation of second-hand market is eliminated. When technology advancement is significant over time, a seller introduces low quality first and high quality later, so that a group of consumers will update the quality of the product they consume over time.