| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w18997 |
| 来源ID | Working Paper 18997 |
| Keeping it Fresh: Strategic Product Redesigns and Welfare | |
| Bruce A. Blonigen; Christopher R. Knittel; Anson Soderbery | |
| 发表日期 | 2013-04-25 |
| 出版年 | 2013 |
| 语种 | 英语 |
| 摘要 | Product redesigns happen across virtually all types of products. While there is substantial evidence that new varieties of goods increase welfare, there is little evidence on the effect of product redesigns. We develop a model of redesign and exit decisions in a dynamic oligopoly model (a la Bajari et al (2007)) and use it to analyse redesign activity in the U.S. automobile market. We find that automobile model designs become obsolete quickly in this market, leading to fairly frequent redesigns of models despite an estimated average redesign cost around $1 billion. Our model and estimates show that firm redesign decisions depend crucially on competition for market share through introductions of new redesigns, as well as internal incentives for planned obsolescence of the existing model design. Based on our structural model estimates and the simulated counterfactuals, we find that redesigns lead to large increases in welfare, as well as substantial profit for firms, due to the strong preferences consumers display for new model designs. We also show that welfare would be improved if redesign competition were reduced, allowing redesign activity to be more responsive to the planned obsolescence channel. The net effect of these changes would reduce total redesigns by roughly 10%, increasing total welfare by roughly 3%. While our model and welfare simulations are focused on the new automobile market, we provide some evidence that the gains from redesigns in the new automobile market are an order of magnitude larger than the losses in the secondhand automobile market. |
| 主题 | Industrial Organization ; Market Structure and Firm Performance ; Industry Studies |
| URL | https://www.nber.org/papers/w18997 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/576671 |
| 推荐引用方式 GB/T 7714 | Bruce A. Blonigen,Christopher R. Knittel,Anson Soderbery. Keeping it Fresh: Strategic Product Redesigns and Welfare. 2013. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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