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- Title
PRODUCT GUARANTEE COMMITMENT: BASED ON GAME THEORY APPROACHES.
- Authors
Pu-yan NIE
- Abstract
Commitment plays an extremely important role in interactions between multiple decision-makers. This paper highlights the effects of a commitment to guarantee goods with high maintenance costs under duopoly. The strategies of both producers under the Bertrand game model are analyzed when guarantee commitments are launched. Surprisingly, we find that technological innovation may result in a decrease in profits. Or the guarantee commitment deters the innovation. Commitments are discussed in the industrial organization community.
- Subjects
WARRANTY; GAME theory; PRODUCT quality; COMMITMENT (Psychology); DUOPOLIES; INNOVATIONS in business; MAINTENANCE costs; MONEY-back guarantees
- Publication
Economic Computation & Economic Cybernetics Studies & Research, 2015, Vol 49, Issue 2, p278
- ISSN
0424-267X
- Publication type
Article