Monopolizing maintenance markets: How firms eliminate time inconsistency problems.
Durable-goods producers often control the maintenance of their products, like how Apple fixes iPhones. This helps them avoid problems with changing their minds over time. The study shows that this strategy is like leasing and can prevent issues with consistency. The research demonstrates this in different scenarios, such as when new and used items are not perfect substitutes. The paper also explores other reasons why companies might do this.