Depreciation erodes the Coase Conjecture
نویسندگان
چکیده
منابع مشابه
Capacity Choice Counters the Coase Conjecture
The Coase conjecture (1972) is the proposition that a durable goods monopolist, who sells over time and can quickly reduce prices as sales are made, will price at marginal cost. Subsequent work has shown that in some plausible cases that conjecture does not hold. We show that the Coase conjecture does not hold in any plausible case. In particular, we examine that conjecture in a model where the...
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This paper analyzes an explicit protocol of contract negotiation between a principal who has all the bargaining power and an agent who holds some private information about his preferences. It extends the framework of the Coase conjecture to situations in which the seller and the buyer must determine the quantity or the quality of the good being sold. The results also provide a foundation for re...
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This paper addresses two general questions. First, what is the eeect of market structure on the development of a network in a dynamic model with rational expectations? Secondly, is the intuition that network externalities arèeco-nomies of scale on the demand side' correct? These questions are examined in a model of durable goodproduction in the presence of network externalities. Two results are...
متن کاملCaptive Finance and the Coase Conjecture∗
In this paper, we propose an explanation for the prominent role of manufacturers in the financing of their own product sales— so called “captive finance.” By lending against their own product as collateral, durable goods manufacturers with market power can commit to restrict production and maintain resale values in future periods, preserving rents today. Using data on captive financing support ...
متن کاملOutside Options and the Failure of the Coase Conjecture
A buyer wishes to purchase a good from a seller who chooses a sequence of prices over time. In each period, the buyer can also exercise an outside option such as moving onto another seller. We show there is a unique equilibrium in which the seller charges a constant price in every period equal to the monopoly price against their residual demand. This result contravenes the Coase conjecture.
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ژورنال
عنوان ژورنال: European Economic Review
سال: 1996
ISSN: 0014-2921
DOI: 10.1016/0014-2921(95)00025-9