Monopolies in durable goods industry stifle innovation and limit competition.
This article explores why some industries stay monopolized, with one company continuously introducing new versions of a product. The researchers looked at how the durability of a product affects pricing and innovation by the current monopolist and potential new competitors. They found that durable products can make it hard for new companies to enter the market, leading to limited pricing strategies by the current leader. This can also result in less innovation happening in the industry.