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[Date] September 11, 2012 [Presenter] Alice Xingwei Lu [Title] 
Fashion Consumers, Delayed Techonolgy Introduction and Rationing This paper studies monopoly production, pricing and technology releasing of overlapping generations of a durable good. We consider a group of fashion consumers who derive an extra utility from buying the latest version of the good at its release period. The existence of fashion consumers benefits the firm through two mechanisms: i) the extra fashion utility the firm can extract; ii) the potential opportunity for the firm to induce multiple purchases. It is shown that in order to induce multiple purchases, the firm may want to withhold its technology in the early versions and lower the price in later versions. Sub‐game perfect equilibria are derived in different scenarios, and conditions are given under which the firm wants to induce multiple purchases and withhold its latest technologies. Counter to intuition, it is the market followers rather than the earlier adopters who benefit from fashion utility. An extension of the model studies the firm's quantity decisions when consumers' fashion utility decreases in availability. Different extents of rationing are valuable to the firm under this assumption.
Seminars / Conferences - Operations, Information, and Decisions
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