Commitment never to lower (nominal) price
Coase’s Other Theorem
- Durable goods monopoly
- Competes with future self
- Want to cut price
- Take case of linear demand and 2 periods
- Consumers anticipate this and wait
- Ghemawat data on price adjustments
- Changing tastes -- Move to larger stones
- Diamond is forever
- Divorce, second marriages, heirlooms?
- Leasing as a solution