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. We show that an arbitrarily small deviation from Coase’s assumptions – a deviation that applies in almost any practical application – results in the failure of that conjecture. In particular, we examine that 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...