Optimal warranties, reliabilities and prices for durable goods in an oligopoly

被引:43
作者
DeCroix, GA [1 ]
机构
[1] Duke Univ, Fuqua Sch Business, Durham, NC 27708 USA
关键词
marketing; warranty; lattice programming; game theory;
D O I
10.1016/S0377-2217(97)00418-9
中图分类号
C93 [管理学];
学科分类号
12 ; 1201 ; 1202 ; 120202 ;
摘要
This paper addresses the problem of durable goods manufacturers in an oligopoly seeking optimal values for three decision variables: product warranty, reliability and price. Each firm seeks a warranty-reliability-price combination that maximizes expected profit subject to quite general constraints on the firm's decision variables. Warranty serves as a signal of product reliability, which is not observable by consumers. We present a game-theoretic model of warranty reliability-price competition in such a market and examine Nash equilibria for this game. We show that under fairly general assumptions each firm can optimally set its warranty and reliability independently of price and competitors' actions. In addition, we show that optimal warranties and reliabilities are complementary, and we explore the impact of different market factors on the optimal warranty and reliability. Finally, we show that optimal warranties are longer and products more reliable when consumers are risk averse. (C) 1999 Elsevier Science B.V. All rights reserved.
引用
收藏
页码:554 / 569
页数:16
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