Planned obsolescence

Planned obsolescence (also called built-in obsolescence or premature obsolescence) is an idea in economics and product design. Planned obsolescence is when someone makes a product so that it will wear out after only a short time. It will either stop working, work much worse than before, or be unfashionable.^[1] This way, the person who bought the product must buy a new one sooner than if the old product had lasted a long time.^[2] This is often called "shortening the replacement cycle."^[3]

Planned obsolescence works when company selling the product has few or no other companies making the same product, because the consumer has few choices.^[4] Before choosing this strategy, the producer has to make sure that the consumer will likely buy from them again and not from someone else. Usually, there is information asymmetry: the producer knows how long the product was designed to last, and the consumer does not. However, when many companies make the same product, they compete. Then product lifespans often increase.^[5][6] In the 1960s and 1970s, the first Japanese cars were sold in America. Because they had longer lifespans than the American car models, American car manufacturers were forced to build cars that lasted longer.^[7]

1. ↑ Bulow, Jeremy (November 1986). "An Economic Theory of Planned Obsolescence" (PDF). The Quarterly Journal of Economics. 101 (4). Oxford University Press: 729–749. doi:10.2307/1884176. JSTOR 1884176. S2CID 154545959. Archived from the original (PDF) on 2020-07-19.
2. ↑ Giles Slade (2006), "Made to Break: Technology and Obsolescence in America", Harvard University Press, p5.
3. ↑ Bidgoli, Hossein (2010). The Handbook of Technology Management, Supply Chain Management, Marketing and Advertising, and Global Management. Wiley. p. 296. ISBN 978-0470249482.
4. ↑ Orbach, Barak (2004). "The Durapolist Puzzle: Monopoly Power in Durable-Goods Market". Yale Journal on Regulation. 21: 67–118. SSRN 496175.
5. ↑ Bulow, Jeremy (1 November 1986). "An Economic Theory of Planned Obsolescence". The Quarterly Journal of Economics. 101 (4): 729–750. doi:10.2307/1884176. hdl:10419/262438. ISSN 0033-5533. JSTOR 1884176.
6. ↑ Hadhazy, Adam. "Here's the truth about the 'planned obsolescence' of tech". Retrieved 2018-07-13.
7. ↑ Dickinson, Torry D.; Schaeffer, Robert K. (2001). Fast Forward: Work, Gender, and Protest in a Changing World. Rowman & Littlefield. pp. 55–6. ISBN 978-0-7425-0895-8.