Econometrica: Oct 1959, Volume 27, Issue 4
The Pricing of Consumers' Durables
Hans NeisserThe utility of consumers' durables to the buyer stems primarily from the services which he expects to enjoy over a number of successive budget periods. Although the services are a time flow, the demand for the durable itself cannot be represented by the usual Marshallian flow demand functions of static character. The models which take the place of the traditional demand-supply scheme are of dynamic character even if the function of price as clearing the market is preserved. The notion of "excess demand" governing price changes adds a further dynamical element.
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