Titel
Reputation or warranty, what is more effective against planned obsolescence?
Autor*in
Stefan Wrzaczek
Economics Frontiers (EF) Program, International Institute for Applied Systems Analysis (IIASA)
Abstract
In determining the durability of its product a firm faces a trade off. Performing a policy of planned obsolescence by making their products less durable implies that the consumer needs to replace them earlier, which thus enhances demand. However, a lower quality of the product will result in a lower reputation, which in turn will affect demand negatively. In many cases, the government protects the consumer by implementing a warranty period. Our paper studies how a firm should optimally deal with this trade off and react to government policy. We obtain the following results. First, we find that the length of the warranty period has an inverted U-shaped effect on the product life time. Second, if more consumers are aware of the existence of a warranty period and ask for a free product replacement, this will increase the product life time. Third, increasing uncertainty about the breakdown of the product also has an inverted U-shaped effect on the product lifetime.
Stichwort
Planned obsolescencewarrantyproduct life cyclequality managementoptimal controlvintage
structure
Objekt-Typ
Sprache
Englisch [eng]
Persistent identifier
Erschienen in
Titel
International Journal of Production Research
ISSN
0020-7543
Erscheinungsdatum
2022
Seitenanfang
1
Seitenende
16
Publication
Informa UK Limited
Erscheinungsdatum
2022
Zugänglichkeit
Rechteangabe
© 2022 The Author(s)
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