| Article ID: | iaor20083627 |
| Country: | United Kingdom |
| Volume: | 58 |
| Issue: | 12 |
| Start Page Number: | 1612 |
| End Page Number: | 1620 |
| Publication Date: | Dec 2007 |
| Journal: | Journal of the Operational Research Society |
| Authors: | Murthy D.N.P., Jack N. |
| Keywords: | game theory, stochastic processes |
The choice of extended warranties (EWs) currently available to consumers is extremely limited. Their EW purchase decisions have to be made at or very close to the time that they purchase the products and, at this point, they are uncertain about item reliability, future operating costs, and usage time before replacement. In this paper, we discuss an EW that offers more flexibility and we investigate optimal pricing strategies for the EW provider and optimal maintenance and replacement strategies for the consumer.