Leasing Versus Selling and Firm Efficiency in Oligopoly

Duke Economics Working Paper No.99-07

Posted: 27 Apr 2000

See all articles by Kamal Saggi

Kamal Saggi

Southern Methodist University (SMU) - Department of Economics

Nikolaos Vettas

Athens University of Economics and Business - Department of Economics; National and Kapodistrian University of Athens - Faculty of Economics; Centre for Economic Policy Research (CEPR)

Abstract

We examine sales and leasing of a durable good in an asymmetric duopoly. We find that inefficient firms tend to lease more. While the low cost firm sells more than the high cost firm, the high cost firm leases more. Further, an increase in unit costs implies a higher ratio of leased units to sales. This pattern is reversed when the unit cost decreases significantly over time.

JEL Classification: L13, D43

Suggested Citation

Saggi, Kamal and Vettas, Nikolaos, Leasing Versus Selling and Firm Efficiency in Oligopoly. Duke Economics Working Paper No.99-07, Available at SSRN: https://ssrn.com/abstract=164809

Kamal Saggi (Contact Author)

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States
214-768-3274 (Phone)
214-768-1821 (Fax)

Nikolaos Vettas

Athens University of Economics and Business - Department of Economics ( email )

76 Patission Street
GR-10434 Athens
Greece
+30 210 8203179 (Phone)

National and Kapodistrian University of Athens - Faculty of Economics ( email )

8 Pesmazoglou street
GR-10559 Athens
Greece
+30 210 8203179 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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