Perishable Durable Goods

We examine whether the Coase conjecture [7, 14, 4, 10] is robust against slight ability of commitment of the monopolist not to sell the durable goods to consumers. We quantify the commitment ability in terms of the speed that the durable goods perish, while keeping the time between the o ers small. We demonstrate that the slight commitment capability makes a substantial di erence by constructing two kinds of reservation price equilibria [10] that refute the Coase conjecture. In the rst equilibrium, the monopolist can credibly delay to make an acceptable o er. All consumers are served, but only after extremely long delay. Most of gains from trading is discounted away, and the resulting outcome is extremely ine cient. In the second equilibrium, the monopolist's expected pro t can be made close to the static monopoly pro t, if the goods perish very slowly. By focusing on the reservation price equilibria, we rigorously eliminate any source of reputational e ect. In fact, by using the rst kind of reservation price equilibrium as a credible threat against the seller, we can construct many other reputational equilibria [2] to obtain the Folk theorem. Various extensions and applications are discussed.