Firm Utilization of Perceived Obsolescence

Perceived obsolescence has been displayed experimentally in many situations, but remains understudied theoretically. We develop a model of consumer demand, where firms aim to maximize their profit from consumers who enjoy network benefits from updated products. Firms face two key choices, pricing and whether to obsolete their product through introducing a new mod-el. In this paper, we demonstrate that perceived obsolescence can be an effective strategy for firms, but must be employed with caution. We then use our findings to derive several testable implications that enable businesses to determine for themselves whether perceived obsolescence can be a viable strategy for them. In particular, we categorize the key differences in optimal strategies between firms that sell products with network benefits, such as social media products, as opposed to those that sell status symbols, such as watches.

Effect on Regional integration on Inter-regional Trade in Africa

Regional integration offers participating countries advantages including the enlargement of the economic space, increased efficiency and the development of interregional trade. In the African regional communities, these assets are slow to emerge because of insufficient progress in the implementation of protocols, lack of economic diversification and various supply-side constraints. Moreover, Africa’s ability to participate fully in world trade is currently hampered by weaknesses in private investment inflows, commodity dependence, non-existent or poorly developed infrastructure, and small regional markets