Reputation or warranty, what is more effective against planned obsolescence?
研究企业在产品耐用性决策中权衡声誉与保修的影响，发现保修期长度和产品故障不确定性对产品寿命呈倒U型效应，而消费者保修意识增强会延长产品寿命。
In determining the durability of its product a firm faces a trade off. Performing a policy of planned obsolescence by making their products less durable implies that the consumer needs to replace them earlier, which thus enhances demand. However, a lower quality of the product will result in a lower reputation, which in turn will affect demand negatively. In many cases, the government protects the consumer by implementing a warranty period. Our paper studies how a firm should optimally deal with this trade off and react to government policy. We obtain the following results. First, we find that the length of the warranty period has an inverted U-shaped effect on the product life time. Second, if more consumers are aware of the existence of a warranty period and ask for a free product replacement, this will increase the product life time. Third, increasing uncertainty about the breakdown of the product also has an inverted U-shaped effect on the product lifetime.