| dc.description.abstract | In this paper, I created a vertical durable goods model considering the intermediate goods market, and discuss how the market power of intermediate goods will affect the behavioral decision of the durable goods firms. Moreover, considering the existence of the intermediate goods market, how the market structure will change to affect the decision of durability. I found that when the number of durable goods firms increase, including Bulow (1986) said that manufacturers have incentives to improve the degree of durability to strike opponents, the price of intermediate goods is also an important factor to affect the durability decision. According to my results, the decision of durability by downstream will rise at the first and then down by the number of downstream manufacturers. In addition, by the comparison of two models, I found when the number of durable goods firms is less, the market power of intermediate goods will induce durable goods manufacturers to improve durability; on the other hand, when the number of durable goods firms is numerous, the market power of intermediate goods will induce durable goods manufacturers to reduce durability. | en_US |