This paper is concerned with product quality, defined as a kind of durability. Existing models of product quality (in the sense considered here) depend on the idea of signaling, itself driven by an informational asymmetry dictated by “Nature.” The paper proposes an alternative approach, which endogenizes the quality management process. A model is developed that is applicable to the markets for consumer durables and for some intermediate goods. Both competitive and monopolistic markets are considered, and some comparative static results are obtained.
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