Return policies, market outcomes, and consumer welfare

Tatyana Chesnokova*

*この研究の対応する著者

研究成果: Article査読

9 被引用数 (Scopus)

抄録

The effect of return policies on market outcomes is studied in a model where consumers differ in their valuations of time. Product reliability is identified with defect rates. Producers first choose reliability levels and then compete in prices. For given defect rates, allowing returns makes products closer substitutes, enhancing competition and reducing prices. Being closer substitutes makes higher reliability less worthwhile, which reduces reliability. While the decrease in reliability reduces consumer welfare, the decrease in prices raises it. The latter dominates, so that aggregate consumer welfare increases with return policy.

本文言語English
ページ(範囲)296-316
ページ数21
ジャーナルCanadian Journal of Economics
40
1
DOI
出版ステータスPublished - 2007 2月
外部発表はい

ASJC Scopus subject areas

  • 経済学、計量経済学

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