PLANNED OBSOLESCENCE AS AN ENGINE OF TECHNOLOGICAL-PROGRESS

Critics of capitalism contend that many products are designed to have uneconomically short lives, with the intention of forcing consumers to repurchase too frequently. This phenomenon is commonly referred to as ''planned obsolescence''. In this paper, we show that a competitive market may generate too much durability in equilibrium. In particular, we show that planned obsolescence may be a necessary condition for the achievement of technological progress and that a pattern of rapidly deteriorating products and fast innovation may be preferred to long-lasting products and slow innovation.