Leasing Versus Selling and Firm Efficiency in Oligopoly
Duke Economics Working Paper No.99-07
Posted: 27 Apr 2000
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: Suggested Citation