Warranty Provision for Repeatedly Purchased Goods in a Competitive Environment

Abstract

The abundance of different forms of warranties in today's consumer products retail market underscores the importance of studying the factors affecting the choice of a warranty contract made by a firm. In this paper, we analyze endogenous choices of quality, warranty and price made by imperfectly competitive firms in the market for repeatedly purchased experience goods. We address the effects of market structure, the dynamics of the market demand, and specific characteristics of the goods on those choices.